“Witnessing a new era of energy”
(University of Houston IELE, Introduction to LNG.)
Introduction

LNG (liquefied natural gas) is actually natural gas in a form of liquid. During the process of liquefaction, Natural gas, chilled to minus 259 degrees Fahrenheit (minus 161 degrees Celsius) at special LNG plants, simply turns into valuable and precious liquid. The liquid is clear and has neither color nor odor. It is also non-toxic and non-corrosive and compared to petrol and diesel fuels, it influences the environment with less pollution. It may well be the energy of the future, notwithstanding high production costs and expensive storage facilities which slowed down its use in commercial appliances in the past half century. It is estimated that LNG trade is expected to grow about 7.5 per cent per year and will be equal to 13 per cent of total world gas supply by 2020. As the demand for LNG supplies is rising, the prices for construction of LNG plants, receiving terminals and special LNG transportation vessels have significally fallen e.g. the construction of a LNG plant is nearly USD 4-5 billion, a receiving terminal is about USD 3-4 billion, a LNG vessel will cost up to USD 0.2-0.3 billion. This creates immense opportunities for buyers and end-users of natural gas. Owing to the peculiarities of the technological process, LNG is warmed to produce natural gas, which is used in cooking and heating as well as for energy generation and other industrial purposes. LNG is also stored in a form of liquid to be used as an alternative source of fuel for vehicles and carriers.

European Governments and leaders are concerned about increased amounts in consumption of natural gas and that’s why they are interested in LNG imports, hoping to meet the rising demand and find new suppliers. A majority of the world’s LNG supply comes from countries with large natural gas reserves. These countries include Algeria, Australia, Brunei, Indonesia, Libya, Malaysia, Nigeria, Oman, Qatar, Russia, Trinidad and Tobago. But it’s necessary to mention that the Commonwealth of Independent States and North Africa basically supply the European natural gas market.
Among Europe’s leading consumers of LNG are United Kingdom, Germany, Italy, the Netherlands and France. It’s amazing, but as early as in 1964 the UK and France went down to the history of the world as the LNG buyers under the world’s first LNG trade from Algeria starting to use new sources of energy. Nowadays, the consuming amount of Europe (25 million tonnes of LNG per year) for various purposes in percentage terms can be presented as follows: more than 50 per cent of the European demand for LNG is used for residential purposes (mainly as a heating fuel), less than 30 per cent for the industrial use and only 20 per cent for generation of electricity. Almost everywhere in the world, the demand for LNG is growing rapidly, because power plants consider natural gas to be an effective fuel to power new highly efficient combined-cycle generating plants. Thus one can see drastic changes as the average growth of European Demand for LNG in 1990-s was 4 % per year and in 2000 it was already 5% per year.

Bibliography

1. Jensen, James T. “The LNG revolution”. The Energy Journal , Vol. 24. No.2 (2003)

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