Liquefied natural gas, commonly referred to as LNG, is natural gas that has been cooled to liquid form for ease and safety of non-pressurized transportation. At approximately -260 degrees Fahrenheit, LNG takes up about 1/600th the volume of natural gas in the gaseous state. This process, known as liquefaction, allows natural gas to be easily stored and transported over long distances via specially-designed tankers. LNG is odorless, colorless, non-toxic and non-corrosive.

The LNG supply chain involves four basic steps: natural gas extraction and processing, liquefaction, transportation, and regasification. Natural gas extracted from fields undergoes processing to remove impurities before being cooled and condensed into liquid form at liquefaction facilities. Tankers then transport cargoes to receiving terminals at destination markets. These terminals regasify LNG back to its gaseous state before entering transmission pipelines for distribution to consumers.

Rising Global Demand for Cleaner Energy

Demand for cleaner-burning and more environmentally-friendly natural gas is surging worldwide. As more countries move to reduce dependence on coal and increase the share of renewables in their energy mix, LNG has emerged as a strategic transition fuel. Power generation accounts for over half of global natural gas demand growth. Rapid urbanization and industrialization are also fueling energy needs in developing nations. Rising imports of liquefied natural gas have allowed some economies like Japan and South Korea to drastically decrease their reliance on nuclear power following the Fukushima disaster. The convenience and reliability of LNG has made it an attractive option to help meet escalating electricity needs while balancing economic and environmental priorities.

The United States Shakes up Global LNG Markets

Technological advancements in hydraulic fracturing, also known as fracking, have unlocked vast reserves of unconventional natural gas trapped in shale rock formations across North America. Coupled with expanded infrastructure for liquefaction and exports, the United States is positioned to dominate worldwide LNG supply growth over the next decade. U.S. LNG exports have increased five-fold since 2016, with new facilities ongoing or planned in Louisiana, Texas and elsewhere. American LNG is disrupting traditional supply patterns and facilitating the emergence of a more liquid and flexible global market. Asian importers like China and India are also increasingly looking beyond traditional suppliers in the Middle East and diversifying their sources to include pipeline gas from Russia as well as seaborne cargoes from the U.S. and elsewhere.

LNG Infrastructure Build-Out Continues Apace

Major liquefaction projects are progressing in key producing regions globally to meet expanding appetite for LNG. In Australia, the country’s position as the world’s largest LNG exporter was further consolidated with the startup of new facilities on Curtis Island. Russia and Qatar remain heavyweight suppliers with ongoing investments to maintain export capacities. East Africa has joined the list of liquefied natural gas exporters led by Tanzania and Mozambique developing offshore natural gas reserves. Even politically volatile places like Cameroon, Nigeria and war-torn Yemen retain ambitions to transform into LNG producers. With the forecast of more demand to come from developing economies, upwards of 350 million tonnes per annum (MTPA) of new production capacity is targeted globally over the medium-term. This build-out will require enormous funding running into hundreds of billions of dollars for projects with operating lives often spanning decades.

Environmental and Sustainability Issues

Despite its advantages over coal and oil, widespread adoption of natural gas and LNG raises environmental issues that merit ongoing monitoring and mitigation efforts. Methane, the primary component of natural gas, is a potent greenhouse gas contributing to climate change. Even small leakages during extraction, processing, transportation and usage reduce the climate benefits of natural gas relative to dirtier fossil fuels. Methane mitigation has thus become an important concern for the natural gas industry and regulators globally. Environmental groups have also flagged habitat destruction from large-scale infrastructure development as well as safety risks of tanker spills or incidents involving massive stored inventories of the cryogenic liquid. Producers, along with governments and international organizations, aim to address these challenges through technologies, emissions regulations, and natural capital accounting to ensure long-term sustainability of the global LNG sector.

Widening Consumer Base

Firmer commitments to decarbonization open new frontiers of opportunity for LNG. Once dominated by power and industrial applications in wealthier importers, the rise of gas for transport fuel is expanding the potential consumer base. Fueling heavy-duty trucks, buses and ships with LNG brings large emissions reductions that help cities and ports transition to greener operations. Initiatives to build LNG fueling infrastructure and convert fleets are picking up from Norway to China. Gas utility companies are deploying upgraded pipeline systems to distribute greater volumes of LNG and natural gas for residential and commercial heating and cooking. Growth pathways keep widening as LNG emerges as a crucial component of diverse global energy transitions through this century.

Concluding Statement

In summary, liquefied natural gas has cemented its role as a rising pillar of world energy commerce. Underpinned by new production sources and greater interconnected infrastructure, international flows of LNG are redefining traditional trade corridors. With its clean-burning attributes and flexibility across application segments, gas and LNG stand well-positioned to enable nations to reconcile energy needs with environmental stewardship over the coming decades. Ongoing sustainability challenges call for proactive solutions. Overall, the future remains bright for LNG to fuel cleaner and more prosperous development worldwide.