What is LNG and what is it used for?

The United States-Israeli war on Iran has hit critical liquified natural gas (LNG) supplies in the Gulf, triggering the most severe disruptions in recent years to the global energy market.

Shipping through the critical Strait of Hormuz, which accounts for 27 percent of the world’s maritime oil trade and 20 percent of LNG, has been brought to a near standstill, with oil-producing nations such as Saudi Arabia rerouting oil through alternative pipelines and Qatar halting LNG production.

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Natural gas makes up about a quarter of global energy consumption, raising concerns about how much the disruption to LNG will affect those most reliant on gas.

What is LNG?

Natural gas is formed over millions of years from decomposed organic matter subjected to intense heat and pressure beneath the Earth’s surface.

LNG is natural gas cooled to -162 degrees Celsius, known as cryogenic processing, shrinking it to a 600th of its gaseous volume.

In its liquid state, LNG is colourless, odourless and non-flammable, making it safe and efficient to transport across vast distances.

Composition and purification

Before liquefaction, the gas is purified through water-based solvents and molecular sieve beds to remove impurities including carbon dioxide, hydrogen sulphide, water and mercury.

Heavier hydrocarbons are then separated from methane and ethane through fractionation, and stored, used or sold as byproducts. The result is a fuel typically composed of 85 to 95 percent methane, with small amounts of ethane, propane, butane and nitrogen.

Storage and transport

LNG is stored in large insulated tanks without the need for high-pressure infrastructure. It is then pumped onto double-hulled carriers and shipped to terminals around the world.

Regasification

At its destination, LNG is heated using seawater or a warm water bath until it vaporises, a process known as regasification, before being moved through pipelines for consumption. It is sometimes blended with nitrogen or propane to ensure compatibility with local gas networks.

What is it used for?

Once LNG is returned to a gaseous state at import terminals, it is dispersed through pipelines for use in homes, businesses and industries around the world.

Residential uses include cooking, heating and generating electricity. In many parts of the world, LNG also supports hot water systems in homes and heating for commercial buildings.

It is used for power generation broadly, offering a comparatively low-carbon alternative to coal and oil.

In industry, it is used for fertilisers, plastics, paints and medicines. It is also used in transport to fuel heavy-duty vehicles and ships.

A man walks through a mustard field during the spring season on the outskirts of Srinagar, the summer capital of Indian-administered Kashmir, on March 24, 2026 [Farooq Khan/EPA]

Gulf nations export close to half the world’s traded urea – commonly used in fertilisers globally, leaving international agriculture deeply vulnerable to any interruption in the LNG shipping lane through the Strait of Hormuz.

The disruption has already forced fertiliser producers across the region to suspend or reduce operations, since natural gas is both the primary feedstock and the fuel that powers the manufacturing process.

A picture of QatarEnergy’s operating facilities on March 3, 2026, in Ras Laffan Industrial City, Qatar. QatarEnergy announced a complete halt to liquefied natural gas (LNG) production at its Ras Laffan and Mesaieed facilities on March 2, 2026, after Iranian attacks targeted energy facilities [Getty Images]

QatarEnergy’s decision to halt gas production following attacks on its LNG infrastructure brought the world’s single largest urea plant to a standstill. In addition, the Omani port of Salalah on the Arabian Sea has been closed, which holds an ammonia storage terminal. The port was hit in a drone attack on March 11.

What are the by-products?

While LNG is primarily valued as an energy source, the processing and liquefaction of natural gas yield a range of by-products with industrial and medical applications.

The most notable by-product is helium, which is extracted during cryogenic processing at LNG facilities using distillation to separate the concentrations of helium from the gas.

Global helium production is estimated to be about 180 million cubic metres annually. The disruption to LNG facilities in Qatar means some 5.2 million cubic metres of helium is taken out of the market each month, accounting for about a third of global monthly production.

Helium is used primarily as a cooling agent for superconducting magnets in MRI and CT scanners, with the average MRI machine needing about 1,700 litres of liquid helium, and some older MRIs needing replenishment every two to three years.

A brain-scanning MRI machine is seen in Pittsburgh, United States, on November 26, 2014 [File: Keith Srakocic/AP]

Helium is also critical to the data centre industry, where it is used to conduct heat away from silicon, preventing parts of semiconductors from being damaged.

The natural gas value chain generates petrochemical derivatives that also form feedstock for manufactured goods.

For example, ethane and propane are cracked to produce ethylene and propylene, which are materials used in plastics such as IV bags, syringes and other medical-grade plastics.

Which countries supply LNG?

According to the International Gas Union (IGU) 2025 World LNG Report, some 411.24 million tonnes (mt) of LNG were traded in 2024.

The largest exporter of LNG is the United States, which in 2024 exported a total of 88.4mt, followed by Australia (81mt), Qatar (77.2mt), Russia (33.5mt) and Malaysia (27.7mt).

Together, the top five countries account for more than three-quarters of global supply.

Which countries import it?

China was the largest importer of LNG with 78.6mt imported in 2024, followed by Japan (67.7mt), South Korea (47.1mt), India (26.1mt) and Taiwan (21.8mt). The top five importers accounted for nearly 59 percent of all global LNG imports in 2024.

South Asian nations such as Pakistan and Bangladesh are also at high risk from the current conflict.

Motorists queue to refuel their motorcycles at a petrol station amid concerns over supplies amid the United States-Israeli conflict with Iran, in Dhaka, Bangladesh, on March 15, 2026 [Mohammad Ponir Hossain/Reuters]

Pakistan’s primary energy source is natural gas, which accounts for 28 percent of electricity generation for the country of more than 250 million people.

In Bangladesh, with a population of about 176 million, gas accounts for half of all electricity generation.

Qatar and the United Arab Emirates supply about 99 percent of Pakistan’s LNG imports and 72 percent of Bangladesh’s, according to trade intelligence firm Kpler.

Earlier in the month, Pakistan introduced emergency measures to tackle the energy shock, including moving to a four-day workweek for government employees and announcing spring holidays for schools from March 16 to the end of the month.

As a precautionary measure, the Bangladeshi government has also reduced gas supplies. Bangladesh is seeking nearly $2bn in loans from international lenders in a bid to fund energy inputs and keep prices stable.

Some petroleum gas tankers heading to India have managed to pass through the Strait of Hormuz despite the conflict — at least one Pakistani tanker has crossed the strait, too. In India, where 5 percent of electricity generation comes from gas, they are now relying more on coal as LNG disruptions continue. India gets about half of its LNG from the Gulf.

On March 9, an Indian government order redirected natural gas and regasified LNG to priority sectors, with curtailments affecting consumers and the petrochemical industry, according to S&P Global.