What is LNG?
Posted: Wed May 18, 2022 8:30 am
From Raymond James' recent "Energy Stat" dated 5-16-2022
Let’s start with natural gas (methane). Natural gas is about ~25% of total global energy consumption, of which liquefied natural gas (or
LNG) is a growing proportion. Among hydrocarbon energy alternatives, natural gas is broadly considered a cleaner fuel, emitting ~55% less carbon
than coal. Traditionally, it is also a more affordable resource, though this is more obvious on a cost of production basis than in observing current
market costs. Perhaps most importantly, natural gas is a significantly more reliable source of energy relative to most renewables alternatives (wind/
solar). < Europe now knows that making wind and solar a high percentage of a nation's energy supply is unwise and will lead to regular power outages.
LNG is a form of natural gas that is the result of cooling the commodity to -260 degrees Fahrenheit, at which point the gas converts into a liquid
state. The cooling process shrinks the volume of natural gas by approximately 600 times, making it significantly easier and safer to transport and
store. LNG is typically then moved to specialized storage tanks in its liquefied state to await transportation. At this point it can be loaded onto
specific carrier vessels for shipment. These vessels are often called liquefied natural gas carriers (LNGCs). The process with LNGC transportation to
a regasification terminal is fairly simple: once vaporized (via regasification) at its central destination point (e.g., a terminal or equivalent), natural
gas can be transported by pipeline to end customers. Alternatively, floating storage and regasification unit vessels (FSRUs) are specialized vessels
that can convert LNG back to its gaseous form without the use of a fixed regasification terminal.
Let’s start with natural gas (methane). Natural gas is about ~25% of total global energy consumption, of which liquefied natural gas (or
LNG) is a growing proportion. Among hydrocarbon energy alternatives, natural gas is broadly considered a cleaner fuel, emitting ~55% less carbon
than coal. Traditionally, it is also a more affordable resource, though this is more obvious on a cost of production basis than in observing current
market costs. Perhaps most importantly, natural gas is a significantly more reliable source of energy relative to most renewables alternatives (wind/
solar). < Europe now knows that making wind and solar a high percentage of a nation's energy supply is unwise and will lead to regular power outages.
LNG is a form of natural gas that is the result of cooling the commodity to -260 degrees Fahrenheit, at which point the gas converts into a liquid
state. The cooling process shrinks the volume of natural gas by approximately 600 times, making it significantly easier and safer to transport and
store. LNG is typically then moved to specialized storage tanks in its liquefied state to await transportation. At this point it can be loaded onto
specific carrier vessels for shipment. These vessels are often called liquefied natural gas carriers (LNGCs). The process with LNGC transportation to
a regasification terminal is fairly simple: once vaporized (via regasification) at its central destination point (e.g., a terminal or equivalent), natural
gas can be transported by pipeline to end customers. Alternatively, floating storage and regasification unit vessels (FSRUs) are specialized vessels
that can convert LNG back to its gaseous form without the use of a fixed regasification terminal.