A LNG Value Chain consists of four main links – Natural gas Exploration and Production; Treatment and Liquefaction; Shipping; and Receiving & Distribution.
- Natural Gas Exploration & Production: In this extraction of oil, natural gas & produced water from natural reservoir is done.
- Treatment & Liquefaction: Treatment of natural gas to make it suitable for processing in liquefaction plant is done after the Exploration & Production process. Processing includes removing liquids, solids, vapours and impurities. Liquefaction converts natural gas into liquid form by using multi-stage refrigeration processes at liquefaction plants which reduces its volume, thus allowing for easy transportation to centres of demand.
- Shipping: After liquefaction, LNG is loaded onto specially designed ships built around insulated cargo tanks to keep the LNG in liquid state throughout the voyage.
- Receiving & Distribution: An LNG receiving terminal comprises LNG storage tanks and re-gasification facilities that convert LNG back to its gaseous state by the application of heat, also known as vapourisation. Thereafter it is send into the pipeline system, for distribution to end-users. The re-gasified LNG has a wide range of end users that spans across all sectors of the gas market from power generation and industrial processes to commercial and domestic application for heating and cooking.
Note: Here, Point 1 to Point 3 is called Upstream process & Point 4 is called Downstream Process.