Stakeholder Communications

LNG Basics

We use natural gas to heat our homes, cook our food, and power our industries. Many new electric power plants use clean-burning natural gas to ensure a reliable supply of electricity for our Nation. Increasing consumption of natural gas, coupled with declining North American production, has led to an increasing reliance on imported Liquefied Natural Gas (LNG). Many foreign countries, such as Indonesia, Algeria, Malaysia, and Nigeria, produce more natural gas than they need. These countries can export natural gas to their neighbors through pipelines, but they cannot reach major consumers of natural gas - such as the U.S. and Japan - by pipeline. However, the volume of natural gas can be reduced 600 times by reducing the temperature. LNG is natural gas that has been chilled to a liquid state at minus 260 degrees Fahrenheit. In its liquid state, natural gas can be transported by ship from gas-rich areas of the world to areas where demand exceeds supply.

US LNG Plants

Export Terminals
Oil exploration in Alaska led to the construction of the first, and only, LNG export terminal in the U.S. Typically, crude oil exploration also yields significant amounts of natural gas. Crude oil from northern Alaska is transported to Valdez, Alaska through the Alaska Pipeline. Natural gas is routed to an LNG plant in Kenai, Alaska, where it is liquefied and then exported, primarily to Japan.

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, recent and forecasted declines in North American natural gas production have resulted in the activation of all four plants. Also, an offshore unloading terminal was put into operation in the Gulf of Mexico in 2005. In 2008, two new import terminals along the Gulf Coast and an offshore terminal near Massachusetts began operations. Several more LNG import terminals are currently under construction.

Peak-Shaving Plants
The gas shortage in the 1970s also drove the construction of many 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.

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 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. There are 104 peak-shaving or satellite plants located in 31 states across the U.S.

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.