Global energy demand is on the rise and LNG facilities are playing a bigger role than ever. LNG is a flexible, lower-emission fuel, and a way to transport and trade natural gas that was once landlocked by domestic demand. Natural gas demand is expected to grow 32% by 2050 with no peak in sight. This massive growth is driven by:
- Artificial intelligence
- Switch fuel
- Backup fuel, and
- Transport fuel.
Kindra Snow-McGregor, PE, from PetroSkills delivered a technical presentation for the WOGA (Women in Oil and Gas Association) April Technical Luncheon – “LNG Market Drivers & Technology”. Lila Salley attended and in this article she shares her key takeaways.
The North American market is rushing to build out LNG infrastructure, as shown in the figure below, to capture more of the international demand and there are numerous challenges. Understanding the market and project development landscape is critical if you want your LNG plans to run smoothly — and profitably.
Lila breaks down what Kindra shared about the current market considerations.
What is LNG and Why It Matters
LNG is natural gas cooled to -260°F to become a liquid, reducing its volume and then shipped at atmospheric pressure. This makes it far more efficient to store and transport — especially over long distances. In fact, LNG is more transportation-efficient than pipeline gas for distances over 1,500 miles and maintains its efficiency even up to 8,000 miles.
LNG Nominal Gas Transportation
LNG’s uses span across:
- Power generation and heating
- Transportation fuel
- Industrial heat source
- Chemical feedstock
LNG is emerging and North America is playing catch-up fast.
- We are projected to double LNG exports by 2028
- US produces 26% of international natural gas consumption demand
- 64% of US LNG exports went to Europe in 2024
LNG Liquefaction Facilities
The LNG market is hot, but that doesn’t make execution easy. Here are some of the biggest hurdles operators face today.
1. LNG Facility Costs & Scale are Staggering
Liquefaction facilities are capital-heavy: $1 billion per 1 million tonnes per year (mtpy) of capacity is the norm. A 5 mtpy plant, a mid-size operation, needs:
- 715 MMscfd of feed gas
- 302,000 horsepower in electricity
- 150 fin fan air-cooled exchangers
That’s before you factor in the 7–8% of gas burned internally just to run the plant.
Operator challenge: Building at scale while maintaining fuel efficiency and hitting commercial milestones.
2. Feed Gas Quality is a Hidden Risk
LNG specs are tight — especially around acid gas and mercury content. Many upstream sources don’t meet this standard without significant pretreatment.
Operator challenge: Designing flexible front-end systems to handle varying feedstock quality without ballooning costs.
3. US LNG Trading Long-Term vs. Spot Market
- Fixed fee of $2.25-3.50 per MMBtu is paid irrespective of lifted volume
- Shipping and re-gasification costs are covered by the buyer
- Trading driven by margin between Henry Hub price and regional spot market
Operator challenge: Balancing long-term fixed fee structures with market uncertainty.
4. Technology Choice Can Make or Break ROI
- ConocoPhillips Optimized Cascade® is a process that utilizes pure propane, ethylene, and methane as refrigerants in a three-stage closed loop circuit. A heavies removal unit (HRU) and/or a nitrogen rejection unit (NRU) can be added to the LNG train depending on the feed composition and downstream requirements.
- APCI-C3MR includes a pre-treatment train to sweeten, dehydrate, and pre-cool the feed gas. Four stages of propane chilling are used to cool the mixed refrigerant which then enters a cryogenic heat exchanger to liquefy the pre-treated gas stream.
- Chart IPSMR™ technology utilizes a heavy hydrocarbon removal system to remove freezing components from the feed gas before liquefaction. A single mixed refrigerant and a cold box comprised of brazed aluminum heat exchangers are then used to liquify the pre-treated gas stream.
Each has trade-offs in footprint, energy intensity, and startup cost. Choosing the wrong one can delay timelines or limit flexibility later.
If you are curious and would like to discuss these, connect with us.
Operator challenge: Matching process technology to project goals, gas characteristics, and long-term offtake strategy.
5. LNG Storage and Shipping
LNG fuelled vessels produce 23% less greenhouse gases. The typical LNG carrier size is 175,000m3, the scale of which can be seen in Figure 3 below. It’s cargo values between $21 to $39 million FOB.
Figure 3: LNG is pumped directly into the interior of the double hulled carrier for shipment.
Marine transport requires specialized LNG carriers, and receiving terminals must have the infrastructure for regasification, storage, and delivery. On land, LNG Virtual Pipelines are increasingly being used for off-grid power generation, truck refueling stations, and supplying gas to remote communities — all requiring small-scale storage hubs and flexible distribution networks.
Operator challenge: Designing for both large-scale export and decentralized delivery. As LNG applications diversify, infrastructure must be adaptable, scalable, and aligned with local demand — without driving up costs or complexity.
6.
The EU Methane Regulation was updated in August of 2024 and applies to both new and existing LNG supply contracts.
Importers are now required to submit details on methane measurement, reporting, and verification (MRV) methodologies from both the exporter and the producer, as well as methane intensity data. Importers must also take “all reasonable efforts” to ensure the MRV measures at the level of the producer are equivalent to those defined by the EU Methane Regulation.
Operator challenge: In the United States market, the importer often does not have a direct contractual relationship with the producer. It is important to be aware of this complexity in order to comply with the reporting requirements.
LNG Outlook for 2025
LNG operators who succeed will be the ones who design for variability, build for efficiency, and plan for volatility.
Kindra referenced the Shell LNG Outlook for 2025. It is a current resource with various tools for you to learn more about the current state of LNG – in-depth report, key facts and figures video, infographics and more.
The team at CANUSA found Kindra’s PetroSkills presentation incredibly valuable and extend appreciation to WOGA for hosting the event.
