LNG is natural gas that has been cooled to liquid form at -162°C to facilitate transportation by pipeline. This allows gas to be transported over long distances more easily. While LNG currently makes up a small portion of global gas production and distribution, demand for gas is projected to increase 50% by 2040, making LNG increasingly important. Major energy companies are recognizing LNG as both a strategic opportunity to diversify their product offerings away from oil as well as a profitable new market for downstream gas distribution to homes and other end users.

1. All you need to know about liquefaction of natural gas (LNG)
LNG is a continuous process where the gas is frozen up to -162°c before it turns into a liquid
form. This concept was created in other to avoid the pipeline to be constricted during the
transportation of the gas. We can see from the diagram below the small proportion of LNG
during the gas life cycle; however, it is already a big challenge.
Production  LNG  Shipping  re-gasification  Distribution
We know that we still have approximately 90 years to extract, process all the liquid gas
resources; compare to the gas resources where we have more 140 years of exploitation.
The statistics of “IHS Markit” show that the global demand of gas could increase by 50% by
2040 and the price is going to be considerably expensive. This is why LNG buyers are
suffering from “indexation anxiety”. If you want to outsmart this procrastination, it is
advisable to take future contracts immediately.
Why is gas going to be a strategic move for upstream companies?
Firstly, gas is going to compensate their oil activities. They will be able to offer another kind
of product to their customers. Secondly, upstream companies could be diverting and
specializing more into the gas industry, hence getting ready for the shortage of oil in the
future.
Why is gas going to be very profitable for downstream companies?
These downstream companies already offer a versatile variety of products to the end users.
In future, gas could be added to their commercialised products; for instance gas used for
heating homes during the winter.
All these products are going to be sold to more customers; hence this could generate a
considerate increase in profits.
In conclusion, some multinational companies like British Petroleum, Shell, Total, etc., are
already considering LNG as a real challenge. We have be informed during the #ADIPEC2017
that LNG could be increased from 270 to over 650mt by 2040. I could expand further as to
why I believe today’s future is LNG and this future is happening now; and we need to take
actions now before it is too late.
By Michel GWETH MBOCK, December 2017