According to one LNG producer, "In the liquefaction process, impurities are removed from the gas before it is cooled. The cooling of natural gas to -162°C causes it to liquefy at which point it takes up 1/600th of its original volume. This allows the gas to be stored and transported safely and economically in large vessels" (LNG Liquefaction Process 2012, p. 2). Interestingly, Chandra (2012) points out that after natural gas is cooled to -- 161.5° C ( -- 260° F) and reduced, the actual volume shrinkage is about 610 times; however, 600 times reduction is typically cited in the literature. Because of its highly cooled and liquid state, LNG. It is typically stored and transported at cold temperatures with low pressure (Chandra 2012). As noted in the introductory chapter, one of the chief benefits of LNG is its compactness in volume compared to its natural gas equivalent, having been reduced by 600 times or more in the liquefaction process. This reduction process makes LNG technologies especially suitable for remote gas fields that might not be amenable siting locations for pipelines or other transportation alternatives, but particularly well suited for transportation by large tankers that are constructed for this specific purpose (Liquefied Natural Gas 2012). This advantage of LNG compared to natural gas is cited by Chandra (2012) who writes, "Gas converted to LNG can be transported by ship over long distances where pipelines are neither economic nor feasible. At the receiving location, liquid methane is offloaded from the ship and heated, allowing its physical phase to return from liquid to gas. This gas is then transported to gas consumers by pipeline in the same manner as natural gas produced from a local gas field" (2012, p. 3). According to the industry analysts at the Australian Government's Department of Resources, Energy and Tourism who report LNG "is transported to dedicated LNG receiving terminals, which have the capacity to store and re-gasify the LNG for supply to markets. LNG, in its liquid state, is not flammable or explosive" (Liquefied Natural Gas 2012, p. 3).

It is important to note, though, that liquefaction of the natural gas must take place before it is suitable for transportation, creating the need for costly and technically sophisticated facilities (Sherbiny & Tessler 1999). Moreover, not only is there a great cost in the liquefaction process and transportation, but LNG regasification terminals cost hundreds of millions of dollars to build and are, therefore, relatively rare, with just around 60 currently operating worldwide; besides significant structural costs, there are also ongoing expenses associated with cleansing impurities from the systems (Sherbiny & Tessler 1999). Furthermore, there are more technical and engineering challenges involved in the LNG process compared to pipeline transportation. The so-called "LNG chain" is comprised of several components: (a) upstream, (b) midstream liquefaction plant, (c) shipping, (d) regasification, and (e) gas distribution and is illustrated in Figure 2 below:

.Figure 2. The "LNG Chain"

Source: Chandra 2012 at http://www.natgas.info/images/lng-fig1.gif

The liquefaction process itself is technologically complicated by fairly straightforward and generally follows the steps depicted in Figure 1 above. The LNG chain involves the reception of LNG tankers at LNG receiving terminals which are also known as "regasification facilities" or simply "regas facilities" (Liquefied natural gas chain 2012). The primary constituent elements of these facilities include:

1. The offloading berths and port facilities;

2. LNG storage tanks;

3. Vaporizers to convert the LNG into gaseous phase; and,

4. Pipeline links to the local gas grid (Liquefied natural gas chain 2012, p. 3).

5. In addition, LNG tankers may also be offloaded offshore to avoid congested and shallow ports using a floating mooring system via undersea insulated LNG pipelines to a land-based LNG facility (Liquefied natural gas chain 2012).

At present, LNG is typically transported to the end consumer by large tankers that are specifically designed for the purpose; older vessels use the gas that is boiled off during transport as fuel while newer ships feature refrigeration that keeps boil-off to a minimum (Liquefied natural gas chain 2012). The majority of LNG facilities operating today are serviced by dedicated fleets of LNG ships which operate on a near-continual basis, but there has been an increasing tendency for LNG ships to transport their cargo where the prices are optimal (Liquefied natural gas chain 2012).

The majority of natural gas imported into the United States is obtained from Canada suppliers with the remainder being obtained on the international market and transported in an LNG form from Trinidad and Tobago, Algeria, Malaysia, Qatar, Oman,...

To date, a number of U.S. companies and consultants have provided LNG field developmental assistance, including technical guidance and project development/construction services in West Africa and Angola (Chambers 2009).
The cost-benefit analysis concerning whether to commercialize a natural gas field through the use of LNG processing or by a pipeline involves a number of variables, but the distance to market is perhaps the most salient, but there are other factors involved in the analysis as well that make each situation unique. According to Chandra (2012), industry best practice indicates that LNG might be a potential alternative in those cases where the following characteristics exist:

The gas market is more than 2,000 km from the field.

The gas field contains at least 3 tcf to 5 tcf of recoverable gas

Gas production costs are less than $1/MMBtu, delivered to the liquefaction plant.

The gas contains minimal other impurities, such as CO2 or sulfur.

A marine port where a liquefaction plant could be built is relatively close to the field.

The political situation in the country supports large-scale, long-term investments.

The market price in the importing country is sufficiently high to support the entire chain and provide a competitive return to the gas exporting company and host country.

A pipeline alternative would require crossing uninvolved third-party countries and the buyer is concerned about security of supply.

The LNG vernacular is somewhat complicated, making the cost-benefit analysis particularly challenging. In this regard, cubic meters or cubic feet are used to measured the volume of produced natural gas, but after it is reduced to LNG, the product is measured in mass units (typically tons or million/tons, or "MMT" or even more frequently, just "MT" (Chandra 2012). Following its conversion back into a gas form, the product is then marketed by energy units (expressed in millions of British thermal units or "MMBtu") (Chandra 2012). According to Chandra, "One ton of LNG contains the energy equivalent of 48,700 ft3 (1,380 m3) of natural gas. An LNG facility producing 1 million tons per year (million tons per annum, or MTA) of LNG requires 48.7 bcf (1.38 bcm) of natural gas per year, equivalent to 133 MMcfd. This facility would require recoverable reserves of approximately 1 tcf over a 20-year life. Similarly, a 4-MTA LNG train would consume an equivalent of 534 MMcfd (requiring reserves of 4 tcf over 20 years)" (2012, p. 208). The operation of the LNG chain is virtually identical to the technologices and equipment used for the production of traditional gas systems, including the types of gas wells, wellheads, and field processing facilities that are used (Chandra 2012). Liquefied natural gas facilities must be provided with LNG that is as pure methane as possible in order to avoid potential damage from harmful constituent elements including carbon dioxide and sulfur which can harm the facility's refrigeration systems, diminish the quality of the LNG produced, or both (Liquefied natural gas chain 2012).

As noted above, although all LNG facilities are unique in some fashion, they have a number of commonalities involved including those depicted in Figure 3 below which shows the layout of a typical LNG liquefaction and loading facility:

Figure 3. Typical LNG Liquefaction and Loading Facility

Source: Liquefied Natural Gas Chain at http://www.natgas.info/images/lng-fig2.jpg

Based on its advantages over other sources of fuel, LNG has become the focus of a growing amount of interest among the international community as well. At present, the total percentage of gas that is transformed into LNG and transported in this form accounts for less than 10% of all gas trade worldwide, but the market for LNG is expanding quickly and there are increasing numbers of sellers and buyers (Chandra 2012). In addition, a majority of major cities throughout North American and Europe, as well as Northern Asia, already feature sophisticated natural gas networks that provide commercial and residential customers with natural gas that is used for heating and cooking (Chandra 2012). In these settings, the delivery of natural gas is accomplished using the marketing structure depicted in Figure 4 below.

Figure 4. Gas is typically delivered to the residential customer via the marketing structure

Source: Chandra (2012) at http://www.natgas.info/images/gasusage-fig3.gif

The LNG industry generally uses one of two primary liquefaction processes as follows:

1. The pure refrigerant cascade process (also known as the Phillips process), or,

2. The precooled propane mixed refrigerant MCR process (promoted by Air Products, Shell, and others, and used by the majority of LNG plants) (Chandra…