Understand the chain
Explainers
Every page here opens with a one-sentence definition, explains the mechanism rather than the marketing, and ends with assets from the tracker so the idea connects to real projects.
Start here
- How LNG worksLiquefied natural gas is natural gas chilled to about minus 162 degrees Celsius, at which point it becomes a liquid roughly 600 times smaller than the gas, so it can be shipped where no pipeline runs.
- The LNG value chain end to endThe LNG value chain is the sequence of production, treatment, liquefaction, shipping, regasification and distribution that moves natural gas between markets no pipeline connects, at an end-to-end energy cost of roughly 10 to 20 per cent of the gas itself.
- The physical properties that govern everythingLNG is a colourless, odourless cryogenic liquid at about minus 162 degrees Celsius, roughly 45 per cent as dense as water, which expands about 600 times on returning to gas and burns only as a vapour mixed with air in a narrow range of concentrations.
- Why minus 162 degrees, and what the cold costsMethane has a critical temperature of about minus 82.6 degrees Celsius, above which no pressure will liquefy it, so LNG production means chilling gas below its atmospheric boiling point of about minus 162 degrees at an energy cost of roughly 8 to 12 per cent of the feed.
Reading the numbers
- Mtpa, bcm and cubic metresLNG capacity is quoted in three incompatible units, and the two conversions that matter are 1 million tonnes a year equals about 1.36 billion cubic metres of gas a year, and 1 cubic metre of liquid equals about 600 cubic metres of gas.
- Reading a capacity figure without being misledAn LNG capacity figure is only meaningful alongside three qualifiers — which unit it is in, which project status it describes, and whether it is a design nameplate or actual output — and most disagreements between sources come from one of those being dropped.
- What terminal status actually meansA project status describes how far an LNG terminal or train has progressed, and the gap between proposed and operating is the single most misread number in the industry.
Making it
- Liquefaction trains explainedA liquefaction train is one complete, self-contained refrigeration line that chills treated natural gas until it condenses, and a large modern train produces roughly 5 to 8 million tonnes of LNG a year.
- FLNG explainedFloating liquefaction, or FLNG, is a complete LNG plant built on a ship-shaped hull and moored over or near a gas field, so gas is liquefied at sea and loaded straight onto carriers without any onshore terminal.
- FSRU versus onshore regasificationAn FSRU is a ship that stores LNG and turns it back into gas while moored, doing the job of an onshore import terminal without the onshore construction.
The ships
- LNG carrier anatomyAn LNG carrier is a ship built around insulated cargo tanks that hold liquefied gas at minus 162 degrees, with an engine able to burn the cargo vapour that inevitably boils off during the voyage.
- Ship classes: conventional, Q-Flex, Q-Max and small-scaleLNG carriers fall into recognised size classes running from small-scale vessels under 30,000 cubic metres, through the 174,000 cubic metre conventional standard, to the 266,000 cubic metre Q-Max ships built for Qatar.
- Membrane versus Moss tanksCargo containment is the system that holds LNG at minus 162 degrees inside a ship, and it comes in two families: membranes, which are thin barriers supported by the hull, and free-standing tanks, which carry their own load.
- Containment II: Moss spheres and SPB tanksA free-standing LNG tank is one that supports its own weight and cargo loads rather than transferring them to the ship's hull, the two commercial designs being the Moss spherical tank and IHI's prismatic SPB tank.
- Insulation, Invar and holding the cold chainLNG containment insulation is the layered barrier that limits heat leaking into the cargo, and Invar is a nickel-iron alloy used in one membrane design because it barely contracts when the cargo cools it.
Machinery
- Propulsion I: steam turbines and why they enduredSteam turbine propulsion drives an LNG carrier by raising steam in boilers that can burn cargo boil-off gas, fuel oil, or any mixture of the two, and turning a turbine geared to a single propeller shaft.
- Propulsion II: DFDE and TFDE, the dual-fuel eraDual-fuel diesel electric propulsion uses medium-speed engines burning either boil-off gas or liquid fuel to generate electricity, which drives electric propulsion motors rather than a directly coupled shaft.
- Propulsion III: ME-GI, X-DF and two-stroke gas injectionME-GI and X-DF are the two families of low-speed two-stroke marine engine burning natural gas, differing in whether gas is injected at high pressure late in the cycle or admitted at low pressure and premixed.
- Boil-off and reliquefactionBoil-off is the small fraction of an LNG cargo that evaporates each day as heat leaks into the tanks, and it is what keeps the rest of the cargo cold.
- Reliquefaction, subcooling and when they payReliquefaction is the process of cooling boil-off gas back into liquid and returning it to the cargo tanks, and subcooling is the partial version that chills the vapour enough to reduce cargo loss without eliminating it.
Operations
- The voyage cycle: laden, ballast, heel and the returnThe LNG voyage cycle is the round trip of a laden leg carrying cargo and a ballast leg returning empty, with a small heel of LNG retained throughout to keep the tanks cold enough to load again on arrival.
- Cooldown, gassing up and the first cargoCooldown is the controlled chilling of warm cargo tanks by spraying LNG into them, and gassing up is the preceding step of replacing inert gas with methane vapour so no carbon dioxide remains to freeze.
- The ship–shore interface: arms, ESD and compatibilityThe ship-shore interface is everything that must be compatible between a vessel and a terminal before LNG can be transferred, from manifold height and spacing to the linked emergency shutdown systems on both sides.
- Ship-to-ship transfer and floating storageShip-to-ship transfer is the movement of LNG directly between two vessels moored alongside one another, used for transshipment, replenishing floating storage, and breaking a full cargo into smaller parcels.
- Custody transfer: gauging, and who owns the errorCustody transfer is the measurement determining how much energy passed between seller and buyer at loading or discharge, calculated from tank level, liquid temperature and density, and a laboratory analysis of the cargo composition.
The shipping business
- Chartering: spot, time charter and tollingLNG chartering is the hire of a carrier, either for a single voyage at a spot rate or for a period under a time charter at a daily rate, with the charterer directing the vessel and the owner supplying and crewing it.
- What freight rates mean and why they swingAn LNG freight rate is the daily cost of hiring a carrier, assessed by shipbrokers for standard routes and vessel types, and it swings violently because fleet supply cannot respond within the time demand changes.
- Who builds LNG shipsLNG carriers are built by a very small group of shipyards, concentrated in South Korea, China and Japan, because the cargo containment work demands skills and facilities that take years to develop.
- Crewing and competency on a gas carrierCrewing an LNG carrier requires officers holding STCW gas tanker endorsements earned through both training and documented service on gas carriers, a qualification pool that expands more slowly than the fleet it has to staff.
- Ice-class carriers and the Arctic routesAn ice-class LNG carrier is a vessel strengthened to operate independently in sea ice, the highest commercial grade being Arc7 ships able to break ice astern, built to serve Arctic export projects along the Northern Sea Route.
- LNG as marine fuel: bunkering and the supply chainLNG bunkering is the supply of liquefied natural gas as fuel to ships rather than as cargo, delivered by bunker vessel, road tanker or shore pipeline, and governed by its own codes and standards.
The bigger picture
- LNG against pipeline gasA pipeline delivers gas at lower cost than LNG over land up to roughly two to four thousand kilometres, beyond which liquefaction wins, and across any significant body of deep water LNG usually wins at any distance.
- LNG and maritime chokepointsA maritime chokepoint is a narrow strait or canal that a large share of seaborne trade must pass through, and LNG exposure to them depends entirely on which exporting region supplies which importing market.
- A short history of LNGLNG began as a way of storing gas for winter peaks in the 1940s, became a traded commodity with the Methane Pioneer's Atlantic crossing in 1959 and the first commercial trade from Algeria in 1964, and has grown into a global market reshaped in turn by Qatar, Australia and US shale gas.