LNG

Liquefied natural gas (LNG) is natural gas that has been cooled to approximately −162°C (−260°F) at atmospheric pressure, condensing it into a liquid state for ease of storage and transport. LNG takes up about 1/600th the volume of natural gas in its gaseous state, making it much more efficient to transport over long distances where pipelines are not economical or feasible.
== Production and Transportation ==
LNG is produced at liquefaction plants, typically located near natural gas fields or major pipeline hubs. The liquefaction process involves several steps:
* Gas treatment to remove impurities
* Dehydration to remove water
* Removal of heavy hydrocarbons
* Cooling and condensation
Once liquefied, LNG is stored in specially designed cryogenic tanks and transported via purpose-built LNG carriers. These ships are double-hulled and use specialized insulation to keep the LNG cold during transit.
== Regasification and Use ==
At the receiving terminal, LNG is offloaded and stored in cryogenic tanks. When needed, it is regasified by warming the liquid back into its gaseous state. The regasified natural gas is then distributed through pipelines for various uses, including:
* Power generation
* Industrial processes
* Residential and commercial heating
* Transportation fuel
== Global Trade ==
The global LNG trade has grown significantly since the first commercial shipment in 1964. Key aspects of the current LNG market include:
* Major exporters: Qatar, Australia, United States, Russia, Malaysia
* Major importers: Japan, China, South Korea, India, Europe
* Pricing mechanisms: Oil-linked contracts and spot market transactions
== LNG Terminals ==
LNG terminals are specialized facilities for the import or export of LNG. They can be categorized as:
* Export (liquefaction) terminals
* Import (regasification) terminals
* Floating storage and regasification units (FSRUs)
== Environmental Considerations ==
While natural gas is often considered a cleaner-burning fossil fuel compared to coal or oil, the LNG process has its own environmental impacts:
* Energy-intensive liquefaction process
* Methane leakage during production and transportation
* Emissions from shipping
However, LNG can also play a role in reducing emissions when replacing more carbon-intensive fuels.
== Market Dynamics ==
The LNG market is influenced by various factors, including:
* Global energy demand
* Environmental policies
* Geopolitical events
* Technological advancements
* Competition from other energy sources
The Henry Hub natural gas price in the United States often serves as a benchmark for global LNG prices, although regional variations exist.
===Futures Contracts ===
==== Henry Hub Natural Gas Futures (CME/NYMEX) ====
*One of the most traded natural gas futures contracts globally
* Serves as a benchmark for the North American and increasingly global natural gas market
* Traded on the New York Mercantile Exchange (NYMEX), part of CME Group
* Highly liquid, with approximately 400,000 contracts traded daily and 1.7 million in open interest
==== EEX Platts JKM LNG Natural Gas Futures ====
* Based on the Platts JKM (Japan Korea Marker) LNG price assessment
* Financially settled futures contract
* Traded on the European Energy Exchange (EEX)
* Represents pricing for the Asian LNG market
==== EEX TTF Natural Gas Month ($/MMBtu) Futures ====
* Based on the Dutch Title Transfer Facility (TTF) natural gas price
* Financially settled futures contract
* Traded on the European Energy Exchange (EEX)
* Represents pricing for European LNG imports
 
==== ICE JKM LNG (Platts) Futures ====
* Based on the Platts JKM assessment
* Traded on the Intercontinental Exchange (ICE)
* Another important contract for Asian LNG pricing
 
==== Abaxx Gulf Coast LNG Futures ====
* Physically settled LNG futures contracts launched in 2024
* Based on U.S. Gulf Coast LNG exports
* Traded on Abaxx Exchange
== References ==
Category:Energy
Category:Natural Gas