LNG (liquefied natural gas)
Natural gas cooled to about minus 162 degrees Celsius so that it becomes a liquid and can be shipped by tanker.
LNG is natural gas cooled to a liquid, which reduces its volume by roughly 600 times for shipping. It is produced at liquefaction plants, carried by specialized tankers and returned to gas at import terminals. Long-term contracts often link price to oil or to Henry Hub, while spot cargoes trade on regional gas prices.
Traders care because LNG links regional gas markets, so a supply disruption in one region can shift prices in others. Liquefaction and shipping capacity limit how quickly supply can respond to demand. Track plant outages, freight rates and regional storage together.
Worked example (illustrative numbers, not real data): a cargo of 3.4 million MMBtu is bought at 4.00 dollars per MMBtu and sold regionally at 6.00 dollars. With 1.20 dollars per MMBtu of liquefaction and shipping cost, the margin is 0.80 dollars per MMBtu, or about 2.72 million dollars for the cargo.