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Liquefied Natural Gas - LNG

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Liquefied Natural Gas - LNG is a clear, colourless and non-toxic liquid which forms when natural gas is cooled to -162ºC (-260ºF). The cooling process shrinks the volume of the gas 600 times, making it easier and safer to store and ship. In its liquid state, LNG will not ignite.

When LNG reaches its destination, it is turned back into gas at regasification plants. It is then piped to homes, businesses and industries where it is burnt for heat or to generate electricity. LNG is now emerging as a cost-competitive and cleaner transport fuel, especially for shipping and heavy-duty road transport.

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  • Product : Liquefied Petroleum Gas

  • Categories : Liquefied Gases

  • Origin : Qatar, Russia, Nigeria, Oman

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Liquefied natural gas (LNG) vessels, also known as LNG tankers or carriers, are ships designed to transport large quantities of LNG: 

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LNG vessels have several unique features to keep LNG in a liquid state, including:

  • Double-hull design: A combination of ballast tanks, cofferdams, and voids around the LNG tanks 

  • Pump tower: A tower that hangs from the top of the tank and contains pumps for cargo discharge, cooling, and stripping 

  • Temperature-controlled tanks: Special tanks made of a material that keeps the LNG at an extremely low temperature 

  • Heavy insulation: Insulation to help keep the LNG in a liquid state 

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LNG vessels are typically around 300 meters long, 43 meters wide, and have a draft of about 12 meters. They have a cargo carrying capacity of 125,000–260,000 cubic meters, with the most popular size being up to 180,000 cubic meters. 

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  • Cargo capacity: LNG ships can have a cargo capacity ranging from 1,000 to 267,000 cubic meters, but most modern vessels are between 125,000 and 175,000 cubic meters. 

  • Speed: LNG carriers can reach speeds of up to 21 knots in open waters. 

  • Size of small LNG ships: Smaller LNG ships, with a capacity of 1,000 to 25,000 cubic meters, are also used in some areas, such as Norway and Japan. 

  • Size of the largest LNG carriers: The largest LNG carriers ever built are the Q-max type MOZAH and her sisters, which have a capacity of 266,000 cubic meters. 

  • Size of the conventional LNG carrier: The new conventional size LNG carrier is 170,000 cubic meters. 

  • Size of the LNG-fueled bulk carrier: The world's first LNG-fueled bulk carrier, delivered in 2018, has a capacity of 50,000 dwt.

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LNG vessels are more environmentally friendly than traditional ships because they use natural gas as fuel for propulsion, which produces fewer greenhouse gas emissions. However, LNG has a lower energy density than diesel, so LNG vessels require larger fuel tanks to achieve the same range. 

LNG vessels are among the most difficult vessels to build, taking up to 30 months to complete. 

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Liquefied natural gas (LNG) is measured in a variety of units, including: 

  • Volume: Cubic meters (m3) or cubic feet (cf) 

  • Mass: Metric tonnes or million tonnes (MT) 

  • Energy: Millions of British thermal units (MMBtu) 

  • Annual production: Million tonnes per annum (mtpa) 

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One metric ton of liquefied natural gas (LNG) is equal to 53.57 million British thermal units (MMBtu). 

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Here are some other LNG conversions:

  • 1 million metric tons of LNG is equal to 48.7 billion cubic feet (Bcf) of gas 

  • 1 cubic meter of LNG is equal to 0.4049 metric tons of LNG 

  • 1 cubic meter of LNG is equal to 584.431 cubic meters of natural gas 

  • 1 million metric tons of LNG per year is equal to 48.7 Bcf per year of gas

  • One million British thermal units (MMBtu) is equal to about 26.8 to 28.26 cubic meters (m3) of natural gas:

  • 1 MMBtu = 26.8 m3 of natural gas

  • 1 cubic meter of LNG is equal to 21.9 MMBtu. 

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LNG is measured in different units at different stages of its process:

  • Produced gas: Measured in volume, such as cubic meters or cubic feet

  • LNG: Measured in mass, such as tons or million tons

  • LNG ship size: Specified in cargo volume, typically thousands of cubic meters

  • Reconverted gas: Sold by energy units, such as millions of British thermal units (MMBtu) 

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The formula for LNG prices can vary depending on the circumstances, but it's often based on a link to oil or gas prices: ​

 

The LNG price is calculated using a formula like  𝑃𝐿𝑁𝐺=𝑎+𝑏*𝑃𝑐𝑟𝑢𝑑𝑒

where

𝑃𝐿𝑁𝐺 is the LNG price and 𝑃𝑐𝑟𝑢𝑑𝑒 is the benchmark crude oil price. The slope (𝑏) and constant term (𝑎) are determined through negotiation. 

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The contractual LNG prices for Asian contries are linked with crude oil price and the LNG price formula which is. generally accept...

 

  • S-curve formula

    This formula was used in China for contracts signed after 2013 when the international LNG supply was tight. 

    • Evolution laws and new trends of global LNG pricing and their ...

      2. S-curve formula. The contracts executed with S-curve formula in China were mostly signed after 2013, and the choice was related...

       

  • LNG netback price

    This is calculated by subtracting the costs of converting gas to LNG and shipping it to the destination port from the price that could be received for LNG. ​​

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  • Bespoke price formulas

    These can be used when the buyer and seller agree to pay logistics costs on a pass-through basis. The formula might include the terminal loading cost, port dues, distribution costs, and a service charge. ​

LNG prices are also influenced by supply and demand in both the domestic and international markets. 

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