LNG (liquefied natural gas) is natural gas cooled to -162⁰C (-260⁰F). The cooling process reduces the gas to approximately 1/600th of its original volume. This makes it practical from a physical and economic perspective to transport gas over long distances. The two main ways of transporting gas over long distances are pipeline and LNG shipping. In some instances, only one or the other is viable as LNG ships cannot operate on land and pipelines are prohibitively expensive over long sea distances. LNG is primarily used as a means for transporting natural gas, but it is also emerging as a viable vehicle fuel.
The LNG market appears set for significant expansion in the coming years as a result of the large number of new liquefaction projects being developed. Recently, we have seen additional capacity in Australia and Papua New Guinea and believe there will be significant additional capacity from more major projects in Australia, US, Russia and East Africa. In addition, significant plans for new exports from new and existing producing regions have been reported.