There is now a process which makes it easier to transport gas over longer distances. It’s called liquefied natural gas. Put simply, gas can now be frozen into liquid form and transported to distant countries in refrigerated tankers. When the LNG is delivered it is heated and converted back into gas form. Then it is supplied to customers using local pipelines.
Having said that, there are two main risks associated with LNG: financial and political. Firstly, the cost of producing and shipping LNG today is still higher than transporting oil, although rapid innovations are reducing the costs. For instance, bigger tankers can now be used. What’s more, the energy industry is expected to invest a massive $100 billion in LNG over the next ten years despite the high capital costs.
Secondly, Russia and the former Soviet Union hold the world’s largest natural gas reserves. Some analysts are therefore concerned that Russia will have a high level of control over the global LNG market within the next decade.
So, as we can see there are political and financial risks associated with the LNG business. Yet, the potential profits are enormous for energy firms with the capital to develop LNG projects. And many experts believe that gas will be the dominant fuel for at least another 50 years.