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Liquefied Natural Gas (LNG) in the U.S.

LNG Basics

LNG Facility1

Liquefied natural gas (LNG) is produced by taking natural gas from a production field, processing it to remove impurities, and then liquefying the processed gas. In the liquefaction process, natural gas is cooled to a temperature of approximately minus (-) 260 degrees Fahrenheit at ambient pressure. This cooling process condenses the natural gas into a liquid form that takes up about 1/600th of the volume of natural gas in its gaseous state.

LNG can be transported much more efficiently than natural gas. Thus, it can be transported by ship from gas-rich areas of the world to areas where demand exceeds supply. LNG can also be transported via specially-built trucks to supply local distribution systems.

For international shipping, LNG is loaded onto special container ships designed and constructed for safety and to provide insulation to help maintain the LNG in its liquid form during long transports. Once an LNG shipment arrives at a receiving port, the LNG is typically off-loaded into well-insulated storage tanks. Regasification converts the LNG back into its gaseous form, which can then be injected into gas transmission and distribution systems for delivery to the end-user.

LNG Table

Natural gas plays a vital role in the U.S. energy supply. It is widely used as a fuel for residential, commercial and industrial purposes. The American Gas Association (AGA) noted (August 2013) that natural gas supplies nearly one-fourth of all of the energy used in the United States and that consumption of natural gas will increase 11 percent by 2030, according to the U.S. Department of Energy (DOE). One of several supply options involves increasing imports of LNG to ensure that American consumers have adequate supplies of natural gas for the future. However, the U.S. Energy Information Administration (EIA), in its Annual Energy Outlook 2013, forecasted that the United States will become a net exporter of LNG by 2016. This projection is supported by growing supplies of domestically produced natural gas, aided partly by higher volumes of shale gas production, resulting in steady declines in LNG imports. Future growth of U.S. LNG exports is, however, highly uncertain and dependent on many complex factors that are difficult to gauge. Nevertheless, in recent years several U.S. LNG import terminals have applied to build liquefaction facilities for export.

US LNG Plants

Export Terminals

The first LNG export terminal built in the U.S. receives natural gas from production wells near Cook Inlet in southern Alaska. Natural gas is routed to the LNG plant in Kenai, Alaska, where it is liquefied and then exported, primarily to Japan. Recently, several other import terminals have sought approval to build liquefaction facilities for exporting LNG. Depending on gas supply and price differentials, these facilities will be able to import LNG when it is needed in the US and export LNG when the resulting economics dictate.

Import Terminals

A domestic gas shortage in the 1970s led to the construction of several import terminals in the U.S. Four import terminals were constructed along the coast of Massachusetts, Maryland, Georgia, and Louisiana. Three of these plants were inactive for many years when both domestic production and imports from Canada increased. However declines in North American natural gas production resulted in the activation of all four plants. Subsequently, in recent years, five more land-based import terminals have gone into operation in Texas, Louisiana, Mississippi, and Puerto Rico. Several offshore unloading terminals have been put into operation as well.

LNG Facility2

Peak Shaving Plants

The gas shortage in the 1970s also drove the construction of many non-export liquefaction plants. These plants are commonly referred to as LNG peak-shaving plants. Pipeline operators liquefy natural gas when demand is low and store the LNG until demand is high. Storage is facilitated by the volume reduction accomplished through converting the natural gas to a liquid state. During periods of high demand, the LNG is vaporized and injected into either the gas transmission system or a distribution system. Some LNG plants are built similar in construction to peak-shaving plants but the LNG is used for vehicular fuel.

Satellite Plants

Satellite peak-shaving plants do not include process equipment to convert natural gas to LNG. Instead, trucks deliver LNG for storage on site. Satellite peak-shaving plants typically inject natural gas into distribution systems.

LNG peak-shaving plants typically have significantly less LNG storage capability than an import terminal, but are located at strategic locations in the pipeline system. Storage of LNG enables a reliable supply of natural gas in areas where pipeline capacity limitations and weather conditions may cause supply and demand discrepancies, notably in the northeastern United States. In other words, LNG storage can increase efficiency and reliability in supplying needed energy resources.

Siting LNG Plants - The location and purpose of the LNG plant determines the agencies involved in the decision process for siting the plant.

Safety Inspections of LNG Plants - Responsibilities for safety inspections of LNG plants are shared among FERC, PHMSA, the U.S. Coast Guard and state regulatory agencies.

LNG Plants Connected to Natural Gas Pipeline Systems - Follow this link for a map.