The following Energy guidance note Produced in partnership with Stuart Beadnall and Anthony Pitt of Stephenson Harwood LLP provides comprehensive and up to date legal information covering:
Practice Note: LNG—an introduction provides a general overview of liquefied natural gas (LNG).
Importantly, any project involving LNG, almost certainly, involves carriage of LNG by sea. The whole purpose of LNG is to carry natural gas in a liquefied form from a producer nation to a user market, in the absence of an available gas pipeline. Methane becomes liquid when cooled to approximately -162°C, in which state its volume is around 1/600th of that in gaseous state. This allows large quantities of natural gas to be carried on ships.
Historically, LNG has been produced at a shore-based liquefaction facility (which requires significant amounts of energy), transported via sea and then regasified at a shore-based terminal for distribution and use as fuel.
The shore-based parts of this chain can, however, be performed at floating facilities. Regasification will tend to take place at or near shore, where demand is. Gas production, treatment and liquefaction, however, can take place entirely offshore, with the facility moored above a gas field hundreds of miles from shore and in a harsh environment.
Floating LNG projects are those which involve processing the gas while on a floating facility; either regasification prior to import into shore pipelines, or liquefaction of gas prior to transport on board a
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