What Is LNG?

 

What is LNG?

Liquefied Natural Gas (LNG) is natural gas that has been cooled to -260°F, changing its state from gaseous to liquid form. As a liquid, natural gas is 600 times more compact, making it much easier to transport and distribute to places where pipelines are not available. Natural gas liquefaction was developed in the 19th century, although its role as a globally traded energy commodity has expanded significantly in the past two decades.

Currently, the five largest LNG exporting countries are:

  1. United States

  2. Australia

  3. Qatar

  4. Russia

  5. Malaysia

LNG transport and infrastructure

In its liquid state, natural gas behaves similarly to crude oil or gasoline. It can be easily shipped across the ocean in specialized cargo ships or tankers, or via rail. Although tremendously versatile in this state, transporting LNG requires specialized and highly advanced infrastructure.

When shipped by sea, LNG takes a 3-step journey. First, natural gas is liquefied or cooled down and transformed from gas to liquid at an export terminal. Then, it is moved to LNG carriers where it is stored in double-hulled cryogenic tanks that maintain the extremely low temperature needed to keep natural gas in its liquid state. Finally, upon arrival to its destination, LNG is placed in onshore cryogenic storage tanks before being turned back to its gaseous form at an import terminal. This last process is known as regasification.

 

 

Source: International Gas Union

 

From the regasification facility, natural gas can be transported through pipelines to industrial complexes and power plants, or distributed directly for residential and commercial use.

Global LNG market

Exporting LNG is not new. But the increased reliance on natural gas as a low-emissions energy source in recent years has underpinned the rise of a truly global natural gas market.

Although historically LNG trade has been driven by Asian markets, especially in Japan and South Korea, recent market liberalization policies have helped expand LNG infrastructure in the region. Simultaneously, China’s coal-to-gas transformation and supply diversification strategies have been driving demand for LNG, and India – another fast-growing economy – is also rapidly building LNG import infrastructure to capitalize on this clean and low-cost fuel.

In 2024, China surpassed Japan to become the world’s largest LNG importer, while Southeast Asia and South Asia have emerged as growing demand centers due to industrialization and energy transition goals.

Europe has also played a major role in the global LNG market.  In 2024, Europe accounted for approximately 53% of total U.S. LNG exports, driven by efforts to replace Russian pipeline gas and bolster energy security. European LNG imports reached a record high of over 140 billion cubic meters (bcm), up from 125 bcm in 2023.

The role of the United States and Texas in the global LNG market

According to the U.S. Energy Information Administration (EIA), the United States exported an average of 11.9 billion cubic feet per day (Bcf/d) of LNG in 2024, maintaining its position as the world’s largest LNG exporter. America’s growing role as a major LNG exporter is in part thanks to the shale revolution, which helped transform the United States into the world’s largest natural gas producer in 2012.

There are currently eight active LNG export terminals in the United States, with a total export capacity of over 13.9 Bcf/d. As of May 2025, there are multiple additional LNG terminals under construction, including Golden Pass LNG and Port Arthur LNG in Texas, which are expected to further boost U.S. export capacity by 2026.

 

Source: Energy Information Administration

 

U.S. LNG exports reached a record high of 11.9 billion cubic feet per day (Bcf/d) in 2024, according to the U.S. Energy Information Administration (EIA). The top destination regions for U.S. LNG exports in 2023 were Europe (66% of total exports), Asia (26%), and Latin America and the Middle East (8%). Among individual countries, the Netherlands, France, and the United Kingdom accounted for the largest shares, together receiving approximately 35% of all U.S. LNG shipments.

As of early 2025, the United States continues to lead global LNG growth, supported by a wave of new infrastructure projects. Ten LNG export terminals are currently under construction across North America, with U.S. facilities expected to add approximately 9.7 Bcf/d of new export capacity by 2028 to meet growing global demand.

Climate benefits of LNG

The expansion of America’s LNG export capacity promises to bring not just domestic economic growth, but global climate benefits. Natural gas has 55% lower carbon dioxide emissions than coal, which means effectively cutting greenhouse gas emissions in half when switching from coal to natural gas for power generation.

The United States has led the world in reducing greenhouse gas emissions in recent years, thanks in large part to the increased use of natural gas. Helping other countries around the world replicate that progress, particularly large industrial economies like China and India, will deliver enormous climate benefits, while also lifting people out of poverty and providing lower-cost energy around the globe.

“President Trump was given a mandate to unleash American energy dominance, and that includes U.S. LNG exports. The facts are clear: expanding America’s LNG exports is good for Americans and good for the world. Today, the Department of Energy is following the facts…and putting America’s energy future on stronger footing.” – U.S. Energy Secretary Chris Wright