by Natural gas is one of the most abundant and widely available fossil fuels in the world. When natural gas is cooled to a liquid state at about -260°F (-162°C), it reduces its volume by about 600 times and becomes liquefied natural gas or LNG. This process of converting natural gas to LNG makes it economical and safe to transport over long distances by ships where pipelines are not practical or available.
Properties and Composition of LNG
In its liquid state, LNG is clear and colourless. It is non-corrosive, non-toxic and odourless. The primary hydrocarbon component of LNG is methane which comprises over 90% of the composition. Other components include ethane, propane, butane, nitrogen and trace amounts of carbon dioxide and hydrogen sulfide. LNG retains all the heat energy content of the natural gas from which it is derived and emits lower greenhouse gas emissions compared to other fossil fuels when combusted.
Advantages of Transportation and Storage
By transforming natural gas into a liquid, LNG facilitates its safe and efficient transportation through ships in specially designed insulated tanks under cryogenic conditions. This allows LNG to be transported over long distances of thousands of miles by ships where pipeline infrastructure does not exist or is not economical. In its liquid form, LNG occupies 1/600th the volume of natural gas in its gaseous state providing critical benefits for international trade through seaborne shipments. LNG terminals have large double walled fully insulated tanks that allow for cryogenic storage at -260°F (-162°C) until the LNG is regasified and distributed through pipelines. The compact liquid state provides significant cost savings for transportation and storage compared to compressed natural gas.
Global LNG Trade and Infrastructure
Many countries are now engaging in global LNG trade to meet rising natural gas demand, diversify energy sources and strengthen energy security. Several LNG exporting nations like Qatar, Australia, Malaysia and the US have developed large scale liquefaction facilities to convert domestic natural gas reserves into LNG for exports. Key importing regions include Japan, South Korea, China, India and countries in Europe which have constructed extensive LNG receiving terminals with regasification facilities. LNG is transported by specialized LNG carriers between export and import facilities. Projects are currently underway to further expand global LNG infrastructure including liquefaction plants, carriers, floating storage and regasification units. As of 2020, around 40 countries worldwide are engaged in LNG trade with annual global trade exceeding 300 million tons of LNG.
Domestic Usage and Economic Benefits
In addition to facilitating international trade, domestic liquefaction plants are also being established in multiple countries to transport and deliver LNG to remote and isolated regions using small scale liquefied natural gas carriers and bunkering vessels. This provides affordable and cleaner energy access to areas lacking pipeline infrastructure. Regasification terminals established along coastal regions help distribute LNG through pipelines to industries, power plants, commercial users and households. Several countries and local economies are benefiting immensely from jobs, investments, tax revenues and income generated across the LNG value chain including exploration, production, construction, shipping, regasification and distribution. LNG based industrial growth also helps reduce emissions through fuel switching from coal and oil.
Environmental Role of LNG
Compared to other fossil fuels, LNG produces markedly fewer emissions of greenhouse gases and air pollutants when utilized for power generation and other applications. Burning natural gas emits up to 50% less carbon dioxide, toxic metals, particulate matter and nitrogen oxides than coal. Switching from coal to natural gas based power is recognized as a major step to curb greenhouse gas emissions and tackle climate change. LNG is also projected to play a growing role through displacement of higher carbon fuels in hard to abate sectors such as long haul transport. The inherent properties of LNG and gas-fired combined cycle power plants provide multiple environmental advantages. However, minimizing methane leakages across the value chain remains an important area to maximize climate benefits and ensure LNG remains a transition fuel supporting decarbonization efforts.
Future Outlook and Growth Opportunities
According to projections, global demand for natural gas is expected to grow substantially over the coming decades driven by strong growth in Asia Pacific and emerging markets transitioning to cleaner fuels. International Energy Agency estimates that LNG trade will need to increase by over 70% from current levels to meet projected gas demand in 2040. Several national oil companies and independent players continue large scale investments to expand global LNG infrastructure. Future growth opportunities exist across the full LNG supply chain including new liquefaction projects based on major gas reserves in Russia, East Africa, Canada and the Middle East. This would attract further investments in large LNG carriers, floating storage units and more integrated downstream facilities. Analysts believe liquefied natural gas plays an indispensable role in global energy security through diversification and competitive international trade and has immense potential to reduce emissions through fuel switching in hard to abate sectors. With innovative technologies also focusing on carbon capture, hydrogen production and bio-LNG, the clean energy prospects from LNG are projected to sustain its long term strategic importance in the global energy landscape.
“*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it”
