Liquefied natural gas (LNG) has commercially been produced and distributed since the mid- to late-1960s, providing a source of energy to people who had not previously utilized it. This production and distribution chain falls firmly in the midstream market, which itself is largely defined as the infrastructural area between the gas treatment plant and the final distributor or sales entity. It includes additional gas processing systems that fractionate natural gas liquids (NGLs) like propane and butane; LNG plants, tankers, and receiving facilities; and pipelines and underground storage facilities. Pipeline-safe gas is brought in, NGLs removed and distributed, and dry gas liquefied for transport and sale.

The development of traditional LNG production and distribution infrastructure can be a somewhat cost-prohibitive task, with liquefaction plants and tanker fleets being some of the most expensive components of LNG midstream. Further, the relatively small global number of purpose-built ports capable of taking on high-capacity LNG carriers has limited wider adoption. As such, the idea of shrinking LNG midstream infrastructure down to a smaller scale has received more attention the past few years, bringing about shorter LNG chains and making the product more available at smaller economies of scale.

The end of 2014 saw LNG exports being threatened by lower oil prices, especially in cases where contracts have stipulated LNG price be linked directly to oil price. In the short term this may have the effect of a reduction in the number of LNG facilities being approved for funding and construction. However, the midstream LNG market isn’t likely to evaporate overnight, and infrastructure to process, ship, and regasify LNG across regions will continue to be needed as long as entities already invested in it stay in for the long-term. This especially holds true for LNG originating from the U.S. where tolling contracts and secure supplies ensure a certain level of sales.