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Energy Currents
A Blog by Enerdynamics

Where Does LNG Come from and Where Does It Go?

by Bob Shively, Enerdynamics President and Lead Facilitator

Liquefied natural gas, commonly known as LNG, has become a key force in U.S. and global natural gas markets. As we pointed it out in our earlier blog LNG Is Booming and Natural Gas Consumers Are Seeing The Effect, LNG exports have become 10 to 15% of total U.S. natural gas demand. Worldwide, demand for LNG is booming, and new LNG deliveries to Europe have helped thwart Russia’s attempt to weaponize energy supply. But do you know exactly what LNG is and how it works? Let’s run through the basics.

What LNG is

Natural gas is a mixture of hydrocarbons, mostly methane. At atmospheric pressure and normal temperatures is it a gas. LNG is natural gas that is so cold it has turned to liquid. Natural gas transforms from gas to liquid at about -260°F (-162°C).

Why we create LNG

Liquefying natural gas requires a lot of energy and expensive facilities. And when we want to use LNG as a fuel, we have to spend more energy and use more expensive facilities to heat it back up or "regasify" it. But, for the right uses it is worth the cost. When we liquefy natural gas, its volume shrinks by a factor of 610. Natural gas is most commonly transported from the wellhead to the consumer by pipeline. We can’t easily transport it by truck or ship because it takes up too much space. By reducing the volume, we can now transport the LNG by ship or truck more practically and can more easily store it in above-ground tanks. This creates lots of valuable uses for LNG. 

What we use LNG for

The majority of LNG is used for transport in tanker ships that move it long distances across oceans where pipelines are not practical. Mostly it is transported in special tankers designed solely to move LNG, but smaller volumes can be transported on standard ships using special LNG containers. LNG imports account for 13% of the natural gas supply in the world.

LNG is also used for local transport by truck where pipelines are not available; as a means of storing natural gas for demand peaks where underground storage is not available; as a fuel for ships, long-haul trucks, and rail locomotives; and by gas distribution utilities as a means of providing supply to consumers during maintenance work.

The LNG delivery chain

The LNG delivery chain for overseas delivery is made up of three key sectors:

  • Liquefaction where the gas is cooled
  • Transport where the gas is moved from the liquefaction facility to the regasification facility
  • Regasification where the LNG is heated to return it to the gaseous state

The LNG may be stored at the liquefaction terminal and/or the regasification terminal.

How LNG flows around the world

Twenty countries around the world export LNG. More than 40 countries import LNG. Primary flows are show on this map:

The top five LNG exporters are Australia, Qatar, the U.S., Russia, and Malaysia. The five largest importers are all in Asia – China, Japan, South Korea, India, and Taiwan. Imports into Europe are growing, and Europe is the second largest importing continent.

LNG is trade will continue to grow

Despite some pressures to reduce natural gas consumption due to concerns over greenhouse gas emissions, use of LNG around the world is growing rapidly and such growth is expected to continue. Many economies depend on natural gas for electric generation, industry, and building heating, so it will take significant time to transition these uses to non-fossil fuels. And in countries with significant coal or fossil fuel consumption for generation and industry, converting to natural gas is a quick interim way to reduce emissions since natural gas is cleaner than the other fuels, especially if fugitive methane emissions are controlled throughout production, processing, and transport. It is important for anyone in the energy industry to understand what LNG is and how it works.

Need to learn more about the LNG industry? Enerdynamics will release its newest online course LNG Overview in February 2023. Contact us at 866-765-5432 ext. 700 or email to get access or order a subscription for your workgroup. 

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Natural gas markets , LNG , Liquefied Natural Gas ,