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LNG report

June 2, 1997

What is LNG? Natural gas when cooled to -160° C. (-258° F.) becomes liquefied natural gas (LNG) and is dramatically reduced in volume. The LNG is transported in insulated ocean-going tankers that deliver it to special receiving terminals. There, it is "regasified," or returned to a gaseous form, then distributed as natural gas to large utilities, independent power plants, and home and commercial users.

Amos Avidan
Mobil LNG Inc.
Houston

What is LNG?
Natural gas when cooled to -160° C.
(-258° F.) becomes liquefied natural gas (LNG) and is dramatically reduced in volume. The LNG is transported in insulated ocean-going tankers that deliver it to special receiving terminals. There, it is "regasified," or returned to a gaseous form, then distributed as natural gas to large utilities, independent power plants, and home and commercial users.

Reserves of natural gas, the cleanest hydrocarbon fuel, are abundant worldwide. Technological advances in gas-fired electrical power generation, as well as environmental considerations, are making natural gas the fastest-growing fossil fuel worldwide.

Most gas is consumed in the area it is produced, but about 20% is traded internationally. Approximately 75% of the traded volume moves by pipeline; the rest moves as liquefied natural gas (LNG).

The LNG industry, slightly more than 30 years old and ready to enter comfortable middle age, has recently begun capturing more widespread attention. In fact, LNG is now the fastest growing segment of the world's energy supply matrix.

Projected growth rate for LNG is about 7% a year in the coming decade. This is about twice projected global gas growth rate and three times that of oil. The LNG market could double by 2010, although it will still be a niche in world energy (about 2%).

This series of five articles covers the key elements in the LNG value chain:

The status of the LNG trade and the entire LNG value chain plus existing plants and proposed new ones, LNG economics, pricing, and the important role of technology throughout the chain.
The abundant worldwide gas reserves, as well as options for remote gas monetization, which in addition to pipeline and LNG trade also include conversion to liquids.
LNG project financing and the challenges that lie ahead in opening up new LNG markets.
LNG liquefaction plant technology, including industry development, various liquefaction processes, and prospects for the future.
LNG shipping and its impressive safety and reliability record.