Liquefied natural gas, or LNG, is natural gas (mostly methane, or CH4) that has been super cooled to minus 160-163 degrees Celsius (minus 260 degrees Fahrenheit). At these temperatures natural gas condenses into a liquid form. When in liquid form natural gas takes up about 1/600th the volume of natural gas (in gaseous form) which may make it more feasible to transport it over long distances. Where moving natural gas by pipelines is not possible or uneconomical, a viable alternative is to transport the gas in liquid form on specially designed cryogenic sea vessels (LNG carriers) or cryogenic road tankers.
LNG is odourless, colourless, non-toxic, non-corrosive and its density is less than one-half that of water. Hazards include flammability, freezing and asphyxia. Furthermore, when the vapour warms up to around -100°C it becomes lighter than air and will dissipate. Consisting ultimately of natural gas, LNG is an energy source that has much lower CO2 emissions than other fossil fuels, such as oil or coal. The energy density of LNG is 60% that of diesel fuel.
The liquefied natural gas (LNG) value chain is made up of four main parts: (1) Exploration and Production (2) Liquefaction (3) Shipping (4) Storage and Regasification. In order for an LNG project to be profitable, the price at which it delivers a unit volume of gas into a pipeline must be at least equal to or exceed the summed up costs of producing, liquefying, transporting, storing, and revaporising the gas, plus the capital costs of the infrastructure and a reasonable return to its investors. The largest cost component of an LNG project usually is the liquefaction plant, with the production, transport and storage amounting to nearly equal portions of the remaining sum.
LNG is transported in specially designed ships that have a double-hulled structure specially designed to prevent leakage or rupture in case of an accident. The load (LNG) is transported at atmospheric pressure and -162 ºC in specially insulated tanks (known as the cargo containment system) inside the internal hull. All the surfaces that come in contact with the LNG are typically made from stainless steel or aluminum or invar in order to withstand the very low temperatures.
Global LNG trade has been rapidly increasing over the last four decades. In 1970, the global LNG trading volumes were only 3 bcm. In 1980 it increased to 35 bcm, 78 bcm in 1990, 140 bcm in 2000 and 483 bcm in 2010. Between 2000 and 2010, the global LNG trade increased more than threefold.
The global LNG market can be divided into two major areas, namely the Atlantic Basin Market and the Pacific Basin Market. Traditionally, the Pacific Basin has been attracting most of the LNG volumes traded, however the Atlantic Basin Market is catching up.
