1.

2 History
Major milestones in development of the modern LNG industry are listed in the box,inset
atright. The process of cooling natural gas dates from the 19th century when the
Britishchemist and physicist Michael Faraday experimented with liquefying different types
of gases, including natural gas. German engineer Karl Von Linde built the first practical
compressor refrigeration machine in Munich in 1873.
The first LNG plant was built in West
Virginia in 1912 and began operation
in 1917. The first commercial
liquefaction plant was built in
Cleveland, Ohio, in1941.
The possibility of transporting LNG
to distant destinations became
reality in January 1959. The world's
first LNG tanker, The Methane
Pioneer, a converted
Liberty freighter from World War II
containing five 7,000-barrel
aluminum prismatic tanks, carried an
LNG cargo from Lake Charles,
Louisiana (US), to Canvey Island,
United Kingdom. This event
demonstrated that large quantities of liquefied natural gas could be transported safely
across the ocean.
Figure 2 – First LNG cargo ship, the
Methane Pioneer:-
Following the successful performance of

The Methane Pioneer, shown in Figure 2

over the next 14 months, seve additional
cargoes were delivered with only minor
problems.
The British Gas Council proceeded with
plans to implement a commercial project to
import LNG from Venezuela to Canvey
Island. However, before the commercial
agreements could be finalized, large
quantities of natural gas were discovered in
the Sahara, closer to England than
Venezuela.

In 1961, Britain signed a 15-year contract to take less than 1 million tonnes per annum
(mtpa) from Algeria, commencing in 1965. The first liquefaction plant in the world was
commissioned at Arzew in Algeria. The United Kingdom became the world's first LNG
importer and Algeria the first LNG exporter. The following year the French signed a similar
deal to buy LNG from Algeria.

In 1969, the first exports of LNG from the United States to Asia began with deliveries from
Alaska's Kenai plant to Japan's Tokyo Gas and Tokyo Electric Power Company(Tepco).

Libya's plant at Marsa el Brega began deliveries to Spain in 1970 and also later to Italy.
U.S. imports from Algeria were approved in 1972, and consequently, between 1971 and
1980, four LNG import terminals were built in the United States, located at Lake Charles
(Louisiana); Everett (Massachusetts); Elba Island (Georgia); and Cove Point, (Maryland).
LNG imports declined in 1979, affected by price disputes and a gas surplus.
In 1972, Brunei became Asia's first producer, bringing on stream an LNG plant at Lumut and
supplying Korea and Japan.
The LNG market has continued growing rapidly in Europe and Asia, with new suppliers
entering in operation in the next years: Abu Dhabi (EAU) started the LNG production in
1977 as the first producer in the Middle East, Indonesia also in 1977, Malaysia in 1983,
Australia in 1989, Qatar in 1997, Trinidad and Nigeria in 1999, Oman in 2000, Egypt in
2004, Equatorial Guinea in 2007, Russia in 2008, Yemen in 2009 and Peru expected for
2010.
The scale of LNG projects has increased dramatically over the past 4 decades, as shown in
Figure 3, e.g., each one of the most recent Qatari liquefaction trains is some 20 times the
scale of the first Algerian train.

Figure 3 – History of LNG Liquefaction Plants:-

LNG accounted for 9.4% of the world’s natural gas demand in 2010.1 The global trade in
LNG, which increased at a rate of 7.4 percent per year over the decade from 1995 to 2005, is
expected to continue to grow substantially during the next few decades, as shown in IEA’s
current forecast (see Figure 4).

Figure 4 – IEA Projection of Rising LNG Global Trad:-

1 BP 2011 Statistical Review.