How does LNG shipping actually work?

LNG travels as a liquid. Natural gas is chilled to minus 162°C, which shrinks it to 1/600th of its gaseous volume, loaded onto purpose-built cryogenic ships, and then regasified at the receiving terminal by exchanging heat with seawater before entering the pipeline grid. The price of that freedom is energy: liquefaction and shipping consume roughly 10–15% of the gas itself.

The starting point is a physical weakness: gas is extremely low-density at ambient conditions. It cannot be barrelled like oil or piled onto a ship like coal. For most of the twentieth century gas was a captive fuel — no pipeline meant no market, and Asian prices often ran five times North American levels. LNG carriers use spherical Moss-type tanks or membrane tanks to absorb the thermal stress of cryogenic cargo, and many burn the cargo's own boil-off gas to power their engines, a self-contained loop of energy transport.

The economics are brutal at the entry point. A single LNG export facility can cost over US$20 billion and needs twenty-year contracts with creditworthy buyers to recover that outlay, which restricts the field to state-scale players. The first commercial cargoes ran from Algeria to Britain in the early 1960s; only the larger, more efficient ships and standardised contracts of the 1990s opened the way to today's explosive growth. The market is now contested by three giants — the United States, Qatar and Australia — with the US recently taking the lead on the back of shale volumes.

Regasification is the final act. Liquid LNG passes through heat exchangers, usually drawing heat from seawater, and expands back into gas with enough force to spin cryogenic turbines and generate a little electricity on the way. The released cold energy is also captured for cold storage or air separation plants. The strategic value of that capability was proved in 2022: after Russia invaded Ukraine and flows through Nord Stream and Yamal were squeezed, countries such as Germany installed floating storage and regasification units (FSRUs) at remarkable speed, and US LNG exports to Europe jumped more than 140% in a single year (Wood Mackenzie).

Singapore is a textbook beneficiary of this logistics chain. The Singapore LNG (SLNG) terminal, commissioned in 2013 at a cost of US$1.7 billion, turned the country from a regional buyer dependent on Indonesian and Malaysian pipeline gas into an international hub able to take cargoes from the US, Qatar or Australia — energy security logic where one supplier equals zero and two equal one. The terminal now averages 9 million tonnes per annum with peak capacity of 11 Mtpa. In October 2024 the Energy Market Authority and SLNG confirmed a second, offshore terminal at Jurong Port using a 5 Mtpa FSRU, taking national regasification capacity to 15 Mtpa.

For Japan or Singapore, LNG is the only way to keep the lights on in a country with no room for large-scale solar or wind farms.

This question is covered in depth in The Full Spectrum Every Energy Source Explained — A Singapore Perspective，第五章 5.3（含新加坡特写）