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Liquified Natural Gas (LNG)


Liquefied Natural Gas (LNG) refers to natural gas that has been cooled to a point where it becomes a clear, non-toxic, liquid. This process, known as liquefaction, reduces the volume it occupies, which makes storage and transport more efficient. As opposed to its gaseous state, LNG is safer and easier to handle, making it a primary method for moving natural gas over long distances, particularly across oceans.


“Liquified Natural Gas (LNG)” in phonetics is pronounced as /ˈlɪkwɪfaɪd ˈnætʃrəl gæs/ (LNG) /ɛl aɪ ɛn dʒi:/

Key Takeaways

  1. Environmental Impact: Liquified Natural Gas (LNG) is considered to be a cleaner source of energy compared to coal and oil, producing fewer emissions and pollutants. However, there are concerns about leaks during extraction and transportation, which could contribute to greenhouse gas emissions.
  2. Transportation and Storage: Unlike normal natural gas, LNG is easier to store and transport as it’s processed into a liquid form. This transformation reduces its volume, making it more feasible to transport across vast distances without the need for pipelines.
  3. Economic Factor: The LNG market has a significant impact on global energy economics. Due to its cleaner nature and versatility in transportation, there is an increasing demand for LNG, particularly in developing nations. Nonetheless, the extraction, processing, and transportation of LNG entail significant costs, linking its profitability to high consumption levels and strong market prices.


Liquified Natural Gas (LNG) holds significant importance in the landscape of global energy due to various reasons. It’s a clean source of energy with fewer emissions compared to coal or oil, which aligns with global efforts towards combating climate change. LNG is capable of being transported over long distances, even where pipelines don’t exist, thus providing energy to remote areas and diversifying supply channels which enhances the security of energy supply globally. It also represents economic opportunities in terms of exports for countries with ample natural gas reserves. Therefore, understanding the dynamics related to LNG becomes critical in the contexts of environmental sustainability, secure energy supply, and economic growth.


Liquified Natural Gas (LNG) is a significant component of the global energy market, primarily used for heating, cooking, and electricity generation. The primary purpose of LNG is to make natural gas more efficient to store and transport due to its significantly reduced volume in liquified form. LNG delivers energy to areas around the world where it is not feasible to transport via pipeline, providing a relatively clean, flexible, and reliable energy source.LNG is an invaluable resource for meeting rising global energy demands and contributing to greenhouse gas emissions reductions. It’s extensively used in industries, homes, and commercial buildings for heating and cooking, and it is increasingly being used as a fuel for vehicles and ships. Furthermore, LNG is employed in power plants to generate electricity, acting as a key player in decreasing the reliance on coal and lowering carbon emissions. Thus, liquified natural gas addresses the world’s growing energy needs while simultaneously tackling environmental concerns.


1. ExxonMobil’s Papua New Guinea LNG Project: ExxonMobil along with its partners, Oil Search and Santos, run one of the largest LNG projects in the world in Papua New Guinea. The project, valued at approximately $19 billion in capital expenditure, delivers LNG to its clients across the globe, primarily in Asia.2. Chevron’s Gorgon LNG Project: The Gorgon Project located in Western Australia is one of the world’s largest natural gas projects and the largest single-resource development in Australia’s history. Chevron is the leader in this project, with ExxonMobil and Shell as partners. Gorgon comprises a three-train, 15.6 million tonnes per annum LNG facility and a domestic gas plant.3. Qatar’s LNG Production: Qatar is currently the largest producer of liquified natural gas in the world. A significant portion of Qatar’s gross domestic product (GDP) is derived from the revenue it generates by exporting LNG worldwide. Qatar Petroleum, the state-owned petroleum company, has extensive links with multinational companies like ExxonMobil, Shell, and Total, paving the way for more advanced and efficient methods of LNG production.

Frequently Asked Questions(FAQ)

What is Liquified Natural Gas (LNG)?

Liquified Natural Gas (LNG) is natural gas that has been cooled down to a liquid state. This process reduces its volume by about 600 times, making it easier to store and transport.

Why is natural gas liquified?

Natural gas is liquified to facilitate easy and safe transportation. In its liquid state, its volume is significantly reduced, making it possible to transport large quantities over long distances where pipelines may not be feasible or cost-effective.

How is LNG produced?

LNG is produced by cooling natural gas until it becomes a liquid. This is done at a liquefaction facility through a process that involves removing impurities, cooling the gas to around -260°F, and then storing it in specially designed tanks.

What is the use of LNG?

LNG serves various purposes primarily in power generation. It is also used in industrial, residential, and commercial heating and cooking. Additionally, it is increasingly used as fuel for vehicles and ships due to its comparatively low emissions.

Is LNG safe?

Yes, if managed correctly, LNG is safe to produce, store, and handle. In fact, because it is non-toxic and non-corrosive, and it evaporates quickly, the risks related to spills or leaks are substantially lower than those related to other hazardous chemicals or fuels.

Is LNG a renewable resource?

No, LNG is not a renewable resource. It is a fossil fuel derived from the remains of plants and animals that lived millions of years ago.

How is LNG transported?

LNG is transported using specially designed LNG carriers that are equipped with insulated storage tanks to keep the LNG in a liquid state. It can also be transported over short distances through LNG trucks.

How is LNG different from CNG and LPG?

The primary difference lies in their physical state and usage. LNG is liquified natural gas and is used mainly for storage and long distance transportation. CNG (Compressed Natural Gas) is natural gas stored at high pressure, often used for fuel in automobiles. LPG (Liquefied Petroleum Gas) is a mixture of propane and butane and is commonly used for heating and cooking.

What is the impact of LNG on the environment?

When compared to other fossil fuels, LNG produces significantly less greenhouse gas emissions. However, it is not totally clean as it’s still a fossil fuel. Also, the process of cooling and converting natural gas into LNG requires a considerable amount of energy.

: What is LNG’s role in the global energy mix?

: LNG plays a crucial role in the global energy mix. It helps diversify energy sources, enhancing energy security across the globe. Also, it is increasingly used as an alternative to coal for power generation due to its lower carbon emission attribute.

Related Finance Terms

  • LNG Carriers
  • Regasification
  • LNG Liquefaction Plant
  • LNG Storage Tank
  • Gasification

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