Natural gas was once a by-product of crude oil production. Since its discovery
in the United States in Fredonia, New York, in 1821, natural gas
has been used as fuel in areas immediately surrounding the gas fields. In
the early years of the natural gas industry, when gas accompanied crude
oil, it had to find a market or be flared; in the absence of effective conservation
practices, oil-well gas was often flared in huge quantities. Consequently,
gas production at that time was often short-lived, and gas could be
purchased as low as 1 or 2 cents per 1,000 cu ft in the field (Ikoku 1984).
The consumption of natural gas in all end-use classifications (residential,
commercial, industrial, and power generation) has increased rapidly since
World War II. This growth has resulted from several factors, including
development of new markets, replacement of coal as fuel for providing
space and industrial process heat, use of natural gas in making petrochemicals
and fertilizers, and strong demand for low-sulfur fuels.
The rapidly growing energy demands of Western Europe, Japan, and the
United States could not be satisfied without importing gas from far fields.
Natural gas, liquefied by a refrigeration cycle, can now be transported
efficiently and rapidly across the oceans of the world by insulated tankers.
The use of refrigeration to liquefy natural gas, and hence reduce its
volume to the point where it becomes economically attractive to transport
across oceans by tanker, was first attempted on a small scale in Hungary
in 1934 and later used in the United States for moving gas in liquid form
from the gas fields in Louisiana up the Mississippi River to Chicago in
1951 (Ikoku 1984).
The first use of a similar process on a large scale outside the United States
was the liquefaction by a refrigerative cycle of some of the gas from the
Hassi R’Mel gas field in Algeria and the export from 1964 onward of the
resultant liquefied natural gas (LNG) by specially designed insulated
tankers to Britain and France. Natural gas is in this way reduced to about