Liquefied natural gas, often abbreviated LNG, is simply the liquid form of the natural gas commonly used for heating homes, cooking, and fueling electrical power plants, among other uses. As you may know, natural gas is a fossil fuel that occurs naturally deep within the earth, most often accompanying deposits of oil but sometimes occurring alone. Liquefied natural gas is formed through the process of liquefaction, in which heat is removed from the natural gas and it is converted to a lightweight liquid.

Natural gas is primarily composed of methane, though traces of other elements and compounds, including water, may also be found within it. Some substances, such as water, must be removed before liquefaction because the extremely low temperature required for the process causes certain such substances to form solids. Liquefied natural gas is colorless, odorless, and produces low emissions when burned as compared to other fossil fuels.

Converting natural gas into liquefied natural gas allows for efficient transportation and storage of the resource. When natural gas is converted to LNG, its volume is significantly decreased, facilitating efficient transport by water over the long distances between continents, thus allowing for the cost efficient import and export of this valuable resource. When a specifically designed LNG carrying ocean vessel delivers its cargo to one of the import terminals in the United States, the liquefied natural gas is stored in special storage tanks until it is time for it to be converted back to a gas and delivered via pipeline to natural gas consumers. Companies providing electric power and natural gas may also "stock up" on LNG when prices are low for use during peak demand times, a technique known as peak shaving.

The demand for natural gas in the United States is widely believed to be increasing at a higher rate than supply at the current level can fulfill. The industry is complex in that numerous levels of the supply chain must align in order to be economical. The vessels that transport liquefied natural gas, import stations where such vessels deliver the gas and the facilities which perform the process of liquefaction as well as converting the liquid back to a gas are extremely specialized and must strike a balance in order to ensure that the process is economical and efficient. Locating and extracting natural gas from within the earth, converting it into a liquid state, safely transporting it via pipeline and or ocean vessels, and converting it back into its gaseous state in an economical way is important to maintaining manageable prices for consumers.