Investment Ideas / Liquefied Natural Gas – LNG

What is LNG

Liquefied natural gas or LNG is natural gas converted to a liquid form for storage or transport purposes. It is usually transported by ship and stored in large storage terminals. LNG is returned to a gas in a regasification facility.

Why LNG

Due to its reasonably low price and abundant supply, LNG (liquefied natural gas) is a good option for reducing petroleum usage. LNG (liquefied natural gas) is also colourless and odourless and the emissions that it creates are considerably lower than petroleum when it is burned.

Efficiency

As LNG is a fuel, its efficiency depends on the efficiency of the technology that converts the fuel into end-uses such as heating or power.

The source

The majority of the supply worldwide originates from countries that possess massive reserves of natural gas and include Australia, Libya, Algeria, Nigeria, Indonesia, Malaysia, Brunei, Qatar, Oman, and Trinidad and Tobago. Currently, 91 LNG (liquefied natural gas) receiving terminals are in operation worldwide and they include South Korea, Japan and numerous countries in Europe.

Although the U.S. does import it in small amounts, the recent trend toward domestic shale gas production increases have greatly decreased the need for imported LNG (liquefied natural gas).Some states, like California, are considering exporting the gas to some non-Free Trade Agreement countries. The necessary paperwork for export licenses has already been filed with the U.S. Department of Energy (DOE) by the state of California. Approvals are slow because the DOE has concerns about possible U.S. energy shortages in the future. Four export terminals in other states have been approved, but only one has started construction, which could take up to four years. It is the Sabine Pass LNG terminal in Louisiana.

Related companies

Country Company Ticker
Grece Aegean Marine Petroleum Network Inc. ANW
Grece Dynagas LNG Partners LP DLNG
Canada Teekay Corporation TK
USA Arc Logistics Partners LP ARCX
USA Cheniere Energy Partners LP. CQP
USA Clean Energy Fuels Corp. CLNE
UK BP plc BP
UK National Grid plc NGG
Netherlands Chicago Bridge & Iron Company N.V. CBI
Italy Eni SpA E

References

LNG, liquefied natural gas by Future of Rural Energy in Europe.
LNG (LIQUEFIED NATURAL GAS) TECHNOLOGIES by NGVA Europe.
Frequently Asked Questions About LNG” by The California Energy Commission.
What is liquefied natural gas used for?” by Patrick E. George for howstuffworks.com.

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