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LNG Transportation History
Liquefied natural gas (LNG) is natural gas that has been cooled to -163 degrees Celsius, at which point it condenses to a liquid. Liquefaction reduces the volume by approximately 600 times, which makes it economical to transport LNG in specially designed gas carriers.
In 1964, the first regular LNG trade was established between the U.K. and Algeria and after the concept proved itself, additional liquefaction plants and regasification terminals were built in both the Atlantic and Pacific basins.
Over the last 25 years, Asia has been the dominant market for LNG, with additional demand from Western Europe. However, in recent years, worldwide demand growth has accelerated, as there is a renewed interest for LNG imports in the U.S. and Europe due to rapid demand growth, while new importers such as India and China have a growing presence in the trade.
On the gas supply side, significant new exporting countries have joined traditional suppliers such as Algeria and Indonesia. Over the last 20 years, new liquefaction plants have been constructed in Australia, Trinidad and Tobago, Nigeria, Oman and Qatar, and rapid further growth is planned.
Unlike the crude oil tanker market, which is dominated by the short-term volatility of the spot cargoes, LNG shipping is considered part of the LNG value chain and is still predominantly based on long-term contracts. As a result of the increasing demand for LNG, the world fleet of LNG carriers is also expanding rapidly. The LNG market is becoming increasingly competitive, with many new trades developing, more shipyards capable of building LNG carriers and an increasing number of shipowners active in this segment. Most existing LNG carriers have capacities of around 138,000 to 145,000 cubic meters (cbm). However, new vessels of 165,000 and 200,000 cbm and larger have been designed and are now under construction.
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