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LNG fundamentals
What liquefied natural gas is, why chilling it to minus 162 degrees is worth the trouble, and how to read the three incompatible units the industry quotes capacity in.
Natural gas is awkward to move. A pipeline is the cheapest way to shift it when one exists and politics allow, but a pipeline is a fixed asset between two fixed points, and most of the world’s gas is not near most of the world’s demand. Liquefaction is the answer to that: chill methane to about minus 162 degrees Celsius and it condenses to a liquid roughly six hundred times smaller than the gas, at which point it fits in a ship and the ship can go anywhere.
Everything else in the chain follows from the cold. The tanks, the alloys, the insulation, the peculiar economics of a cargo that slowly boils away, the reason a handful of firms make the exchangers and a handful of yards build the ships: all of it exists because holding a liquid a hundred and sixty degrees below ambient is genuinely difficult and does not become easier with scale.
This track covers the physical facts that the rest of the site assumes, and the unit conventions that cause most of the confusion when comparing one source against another.
8 modules
All written.
- 01How LNG works
Liquefied 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.
- 02The physical properties that govern everything
LNG 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.
- 03Why minus 162 degrees, and what the cold costs
Methane 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.
- 04Mtpa, bcm and cubic metres
LNG 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.
- 05Reading a capacity figure without being misled
An 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.
- 06The LNG value chain end to end
The 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.
- 07LNG against pipeline gas
A 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.
- 08A short history of LNG
LNG 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.
Vocabulary for this track
15 terms, defined in full in the glossary.