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Liquefied Petroleum Gas (LPG) is synthesized by refining petroleum or "wet" natural gas, and is usually derived from fossil fuel sources, being manufactured during the refining of crude oil, or extracted from oil or gas streams as they emerge from the ground. If it comes from the ground, there always a water vapor component in the gas stream. The refiners try to remove as much water as economically possible, but a small percentage will remain with the gas.

Since water is heavier than LPG and does not mix with it, it is possible to remove water from a storage vessel by venting it at the bottom. Ideally, the vessel should be chilled to cause most of the water to condense and settle to the bottom. The partial pressure of the LPG will force the heaviest liquid (water) out the vent valve first, followed by mostly LPG. If even drier gas is required, it can be forced through a drier that contains water adsorbent materials. When the drier is saturated with water it needs to be replaced.

Small amounts of water don't impair the usefulness of LPG as a cooking or motor fuel. However, if it is to be used as a refrigerant, replacing R-22 in a domestic air conditioning system or R-134a in an automotive air conditioning system, it should be as dry as possible in order to prevent corrosion of the system components. For refrigerant use, highly refined liquefied propane is available from companies such as Duracool, so the end user need not be concerned with contaminating a refrigeration system with water.

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