Environment Sustainability, Government Support to Expand Utilization of Liquefied Natural Gas


Published Date : Jul 27, 2016

At present, the demand for liquefied natural gas is on the rise due to environmental benefits and ease of handling. Natural gas causes half the amount of pollution than that caused by coal in power generation, thus making it an increasingly popular energy source. The ease of storage and transportation of natural gas over long distances helps in expanding the supply and enhancing energy security in the long run. 

The liquefied natural gas (LNG) industry though relatively new, is now an integral part of the global energy market. The trade for liquefied natural gas has expanded by leaps and bound in the last two decades and is anticipated to double in the future years. 

The use of LNG in place of natural gas is uneconomical. This is mainly because of the special terminals required for the liquefaction and regasification processes. Due to the high cost involved in the construction of specialty infrastructure, currently only 28 countries worldwide have facilities for regasification, according to the International Gas Union.

The demand for LNG in Europe is largely met by imports. This is mainly due to the decline in domestic consumption and a rapid decline in domestic production. In addition, the recent drop in gas prices along with abundant supply and a weak global economy have steered LNG supplies to Europe.

According to the International Energy Agency and the European Commission, this trend in the Europe LNG market is expected to continue in the coming years as well. The emergence of new LNG suppliers and increasing export of shale from the U.S. will further reshape the energy scenario in Europe.

The use of LNG as an industrial fuel offers numerous advantages. Due to the significantly large requirement of distillate fuels for industrial processes, the transition from conventional fuels to LNG can help in considerable capital savings. Moreover, the use of LNG for industrial equipment such as industrial boilers, mining equipment, and drilling equipment is cost-effective and free of emissions. In several parts of the world, government mandates are in place for the use of LNG in the industrial sector in order to curb greenhouse gas emissions.