LNG is natural gas in its purified and liquefied form. In 2016 the global LNG production capacity  was 340 million tons, whereas the demand in 2016 was 264 million tons, resulting in a low capacity utilization. A further 100 million tons of LNG production capacity is under construction to come on stream from 2017-2020. The capacity increase has resulted in a buyers market and international LNG spot prices have come down as a consequence over the last few years.

LNG characteristics

Natural gas is liquefied by cooling it to approximately -162 °C at close to atmospheric pressure. The resulting colorless, odorless, non-toxic and non-corrosive liquid natural gas (LNG) consists mainly of methane (CH4) with low concentrations of other hydrocarbons (e.g. ethane, propane and butane) and inert components such as nitrogen.

Please refer to the Material Safety Data Sheet (MSDS) for more details.

LNG value chain

The major advantage of LNG is its relatively high energy density: it takes up only 1/600th the volume of natural gas and is therefore ideally suited for transport and storage.  Therefore LNG enables cost competitive long distance transport of natural gas.

The main LNG export countries are Qatar, Australia and the USA. The main LNG import countries are Japan, Korea, China and Europe. The LNG is transported using large cryogenic LNG tankers.

Upon import at dedicated LNG import terminals the LNG is stored in large LNG storage tanks and subsequently compressed and vaporized for injection into the gas transmission grid.

Most LNG import terminals in Europe have truck loading facilities, where LNG can be loaded on LNG trailer and containers for further distribution to customers that are not connected to the gas grid. The volumes that are distributed by trailers and containers are typically only a small fraction of the total LNG imports. However demand for such distributed LNG is growing fast, while the over demand for pipeline gas in Europe do not show long term growth.

The LNG that is distributed by trailers or ISO tank containers are used as fuel for a broad range of applications e.g. industrial processes, power plants, road transport and marine transport.

LNG is natural gas in its purified and liquefied form. Although LNG has been around for many decades, only in the last 10yrs or so the trade in LNG has really become global and significant.