Frequently Asked Questions About LNG

What is LNG?

Liquefied natural gas, or LNG, is natural gas in its liquid form. When natural gas is cooled to minus 259 degrees Fahrenheit (-161 degrees Celsius), it becomes a clear, colorless, odorless liquid. LNG is neither corrosive nor toxic. Natural gas is primarily methane, with low concentrations of other hydrocarbons, water, carbon dioxide, nitrogen, oxygen and some sulfur compounds. During the process known as liquefaction, natural gas is cooled below its boiling point, removing most of these compounds. The remaining natural gas is primarily methane with only small amounts of other hydrocarbons. LNG weighs less than half the weight of water so it will float if spilled on water.

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Where does LNG come from?

A majority of the world's LNG supply comes from countries with large natural gas reserves. These countries include Algeria, Australia, Brunei, Indonesia, Libya, Malaysia, Nigeria, Oman, Qatar, and Trinidad and Tobago.

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What countries import LNG?

There are 91 LNG receiving terminals located worldwide. Japan, South Korea, and a number of European Counties import LNG. The United States still imports small amounts of LNG, but far less than it did prior to the current increases in shale gas production. (Source: Bureau of Economic Geology, University of Texas at Austin, Introduction to LNG.)

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Will California become an exporter of LNG?

The increase in shale gas production and lower price in the United States has renewed interest in exporting LNG. Currently, there are 28 planned LNG export terminals that have filed with the U.S. Department of Energy (DOE) for licenses to export to non-Free Trade Agreement countries. DOE has been cautious about approving these licenses because of concerns that high levels of LNG exports might cause gas shortages and price increases in the United States. Prospective export terminals can take two to four years to build and cost billions of dollars. In that time frame, the foreign market for U.S. LNG could be met by other sources closer to demand, such as Australia or Qatar. Among the four approved export terminals, only the Sabine Pass LNG terminal in the Cameron Parish of Louisiana has begun construction. The prospects for California to be an exporter are extremely low as the state is neither a big producer nor net exporter of natural gas.

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Where are LNG import terminals located in the United States?

Currently, there are neither existing LNG import terminals located in California, nor are there any pending LNG import terminals awaiting approval. A few LNG projects were proposed in the Pacific Northwest. LNG terminals in the United States are located in Everett, Massachusetts; Cove Point, Maryland; Elba Island, Georgia; and Lake Charles, Louisiana; Offshore Boston; Gulf of Mexico; Freeport, Texas; Sabine, Louisiana; and Peñuelas, Puerto Rico. For more information, please visit:

DOE LNG maps: http://www.energy.gov/sites/prod/files/2013/04/f0/LNG%20Import%20%26%20Export%20Terminal%20Maps%2012-18-2012.pdf

FERC LNG facility maps: http://www.ferc.gov/industries/gas/indus-act/lng.asp

DOE list of proposed and approved LNG export applications: http://www.energy.gov/sites/prod/files/2014/02/f8/Summary%20of%20LNG%20Export%20Applications.pdf

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How is LNG transported?

LNG is transported in double-hulled ships specifically designed to handle the low temperature of LNG. These carriers are insulated to limit the amount of LNG that boils off or evaporates. This boils off gas is sometimes used to supplement fuel for the carriers. LNG carriers are up to 1000 feet long, and require a minimum water depth of 40 feet when fully loaded. As of 2012, there were 360 ships transporting more than 220 million metric tons of LNG every year. (Source: Bureau of Economic Geology, University of Texas at Austin, Introduction to LNG.)

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How is LNG stored?

When LNG is received at most terminals, it is transferred to insulated storage tanks that are built to specifically hold LNG. These tanks can be found above or below ground and keep the liquid at a low temperature to minimize the amount of evaporation. If LNG vapors are not released, the pressure and temperature within the tank will continue to rise. LNG is characterized as a cryogen, a liquefied gas kept in its liquid state at very low temperatures. The temperature within the tank will remain constant if the pressure is kept constant by allowing the boil off gas to escape from the tank. This is known as auto-refrigeration. The boil-off gas is collected and used as a fuel source in the facility or on the tanker transporting it. When natural gas is needed, the LNG is warmed to a point where it converts back to its gaseous state. This is accomplished using a regasification process involving heat exchangers.

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How is natural gas stored?

Natural gas may be stored in a number of different ways. It is most commonly stored underground under pressure in three types of facilities. The most commonly used in California are depleted reservoirs in oil and/or gas fields because they are more available. Aquifers and salt cavern formations are also used under certain conditions. The characteristics and economics of each type of storage site will dictate its suitability for use. Two of the most important characteristics of an underground storage reservoir are its capability to hold natural gas for future use and its deliverability rate. The deliverability rate is determined by the withdrawal capacity of the associated valves and compressors and the total amount of gas in the reservoir. In other states, natural gas is also stored as LNG after the natural gas has been liquefied and placed in above-ground storage tanks. (Source: U.S. Department of Energy, Energy Information Administration.)

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How is LNG used?

LNG is normally warmed to make natural gas to be used in heating and cooking as well as electricity generation and other industrial uses. LNG can also be kept as a liquid to be used as an alternative transportation fuel.

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Why use LNG?

Natural gas is the cleanest burning fossil fuel. It produces less emissions and pollutants than either coal or oil. Historically the United States imported LNG to numerous import facilities along the Gulf Coast and on the East Coast, but as shale gas production has grown in numerous U.S. supply basins, many existing and proposed LNG facilities have applied for licenses to export LNG to foreign countries. Since LNG occupies only a fraction (1/600) of the volume of natural gas, and takes up less space, it is more economical to transport across large distances and can be stored in larger quantities. LNG is a price-competitive source of energy that could help meet future economic needs in many foreign countries.

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Is LNG flammable?

It depends. When cold LNG comes in contact with warmer air, it becomes a visible vapor cloud. As it continues to get warmer, the vapor cloud becomes lighter than air and rises. When LNG vapor mixes with air it is only flammable if within 5%-15% natural gas in air. Less than this is not enough to burn. More than this, there is too much gas in the air and not enough oxygen for it to burn.

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Is LNG explosive?

As a liquid, LNG is not explosive. LNG vapor will only explode if in an enclosed space. LNG vapor is only explosive if within the flammable range of 5%-15% when mixed with air.

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What about security?

All LNG ships must comply with all pertinent local and international regulatory requirements, which include regulations and codes set forth by the International Maritime Organization (IMO), the U.S. Maritime Administration (MARAD), the U.S. Coast Guard (USCG), and the U.S. Department of Transportation (DOT), as well as the hosting Port Authority.

DOT regulations must be followed at onshore LNG facilities and marine terminals. The Research and Special Programs Administration, DOT, regulations include 49 CFR Part 193 - Liquefied Natural Gas Facilities: Federal Safety Standards. These standards specify siting, design, construction, equipment, and fire protection requirements that apply to new LNG facilities and to existing facilities that have been replaced, relocated, or significantly altered.

Offshore marine terminals must follow regulations set by the USCG. The USCG monitors the safety of coastal waters around the U.S. and ensures the safety of ships while in U.S. waters and in port by preventing other ships from getting near LNG tankers. The USCG works with local harbor authorities and LNG facility personnel to ensure that proper procedures are followed. The USCG and MARAD are the federal agencies responsible for siting off-shore LNG facilities and are currently developing regulations.

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How does LNG get permitted in California?

The California Environmental Quality Act (CEQA) was enacted in 1970 to be used in the environmental review of land-use development and management decisions in California. An Environmental Impact Report is the final product of the CEQA environmental review process. It covers the scope of the applicant's proposal and analyzes all of the known environmental effects of the proposed project. In most cases, the CEQA review goes beyond the requirements established in the federal National Environmental Policy Act (NEPA).

In the siting process, one federal agency takes the lead role for environmental review under the NEPA, and one state or local agency takes the lead role under CEQA. Once the lead agency is identified, all other involved agencies, whether state or local, become responsible agencies. These responsible agencies do not prepare their own documents, but instead are required to consider the environmental document prepared by the lead agency.

However, in the permitting process of LNG facilities, the Energy Policy Act of 2005 (the Act) grants the Federal Energy Regulatory Authority (FERC) the exclusive authority to issue licenses for the siting, construction, operation, and modification of LNG import terminals onshore and in state waters, with limited exceptions. The exceptions involve the exercise of federally-delegated authority only under the federal Coastal Zone Management Act, the federal Clean Air Act, and the federal Clean Water Act by state or local agencies. The state also has the ability to be a cooperating agency with FERC during the NEPA review and can contribute to the environmental review.

Some of the various permits that an applicant must obtain from the state include:

Air permits

Land permits

Coastal land permits

Water permits

Coastal water permits

The Act does not grant the power of eminent domain to FERC; therefore, any state or local agency with public land stewardship responsibilities retains its authority to review and approve land lease applications, and the preparation of a CEQA document to support that decision. The Act does not impact the siting authority of state agencies reviewing offshore LNG import terminal applications. The California Energy Commission does not hold any regulatory authority in the siting of LNG facilities in California.

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