The industry is younger than most people assume, and it was nearly strangled at birth.
Storage before trade
The first use of liquefied natural gas was not shipping it anywhere. It was storing it.
Gas demand peaks in winter, production does not, and a utility with a cold snap coming needs somewhere to put gas it bought in summer. Liquefying it shrinks it six hundredfold, so a modest tank holds a great deal of winter supply. The first commercial plant built on that logic opened in Cleveland, Ohio, in 1941.
Cleveland, 1944
On 20 October 1944, a tank at the East Ohio Gas Company failed. Liquid ran into the streets and down the sewers, vaporised, found ignition sources, and burned. A hundred and twenty-eight people died.
The tank had been built during wartime, when nickel was rationed, using a steel with a lower nickel content than the design called for. At cryogenic temperature that steel was brittle, and it cracked.
The lesson was learned precisely and expensively: cryogenic containment is a materials problem before it is anything else. Modern practice — nine per cent nickel steel, full containment tanks with an outer wall able to hold the entire contents, exclusion zones sized from vapour dispersion modelling — traces directly to that failure. So does the industry’s decade-long pause afterwards.
The Methane Pioneer, 1959
The idea of moving LNG by sea was patented as early as 1914, but it took until 1959 to try it at scale.
The Methane Pioneer was a converted wartime cargo ship fitted with aluminium tanks. In January 1959 she carried LNG from Lake Charles, Louisiana, across the Atlantic to Canvey Island on the Thames. Seven voyages followed. Nothing went wrong, which was the point: the demonstration existed to prove the cargo could survive an ocean crossing without incident.
Algeria, 1964
Demonstration became trade five years later. The CAMEL plant at Arzew in Algeria began shipping to Canvey Island in 1964, carried by two purpose-built ships, the Methane Princess and Methane Progress.
This was the real beginning: a liquefaction plant, dedicated carriers, a receiving terminal, and a long-term contract binding them together. Almost every structural feature of the modern industry — the twenty-year contract, the dedicated fleet, the take-or-pay obligation that makes a plant financeable — dates from this arrangement rather than from anything invented since.
The Pacific trade, 1969
Alaska began shipping from Kenai to Japan in 1969, and that trade shaped the industry more than its modest volume suggests. Japan had no domestic gas, an economy growing fast, and after the oil shocks a powerful reason to diversify away from crude.
Japanese buyers became the anchor customers for a generation of projects across Brunei, Indonesia, Malaysia, Abu Dhabi and Australia. They also entrenched oil indexation: with no gas price to reference, contracts were priced against crude, and the convention outlived the reason for it by decades.
Qatar and the scale revolution
Through the 1990s, LNG remained a business of regional pairings: a plant, a customer, a fleet, a contract.
Qatar broke the pattern in the 2000s by building at a scale nobody had attempted. Trains of around 7.8 Mtpa, roughly double what was then conventional, using the AP-X process. Q-Flex and Q-Max carriers up to 266,000 cubic metres, far larger than anything afloat, fitted with onboard reliquefaction so the boil-off need not be burned.
Scale drove unit costs down hard, and cheap volume made arbitrage between Atlantic and Pacific markets worthwhile. That is the point at which LNG began behaving like a global commodity rather than a set of bilateral arrangements.
Shale, and the American reversal
In the late 2000s, US terminals were being built to import LNG. Within a few years horizontal drilling and hydraulic fracturing had made the country awash in cheap gas, and several of those import terminals were rebuilt to export instead. Sabine Pass shipped the first cargo from the lower 48 states in February 2016.
The commercial model changed with the geography. American projects were largely tolling arrangements priced off Henry Hub rather than oil, and sold without destination clauses. Cargoes that could go anywhere are what made a genuine spot market possible.
Recent years
Australia built out rapidly through the 2010s, including the first large floating liquefaction vessels, briefly overtaking Qatar as the largest exporter.
Then in 2022 Europe replaced a large share of its piped supply with LNG in a matter of months, chartering FSRUs at unprecedented rates because a floating terminal can be deployed in about a year and an onshore one cannot. Prices reached levels nobody had modelled, and a wave of new liquefaction reached final investment decision on the strength of them.
Whether that wave arrives into a tight market or a glutted one is the open question the current project pipeline will answer, and it is the reason a tracker of what is proposed, under construction and operating is worth keeping.