Natural gas v LNG: What is the difference and how are they used in Asia?
Natural gas – often simply described as ‘gas’ – is a fossil fuel that is widely used around the
world for a range of essential purposes. Formed from decomposed organic matter that has been
subjected to intense heat and pressure underground over millions of years, natural gas can be
used as a domestic fuel for cooking and heating, as a fuel that provides reliable and flexible
power generation and as a key ingredient in chemical manufacturing processes, such as
fertiliser and polymer production.
Natural gas is highly valued for power generation as the cleanest burning fossil fuel, particularly
in Asia where more than 50 per cent of electricity still comes from coal.
What is LNG and how is it produced?
The term LNG stands for liquefied natural gas. As the name implies, LNG is gas that has been converted to liquid form through liquefication, a process which involves natural gas being cooled to extremely low temperatures (-162C on average). LNG takes up about 1/600th of the original volume of gas and can be stored or moved without the need for high pressure.
The biggest advantage provided by LNG is that very large volumes of gas can be safely and relatively simply transported for vast distances, including by sea. Double-hulled carriers with ultra-low temperature storage capabilities are used to ship LNG over routes covering thousands of kilometres . Once the LNG has arrived at its destination, it undergoes regasification and can then be moved via pipeline for consumption.
In the context of Asia, where many countries lack gas resources for self-sufficiency, LNG provides a flexible way of meeting energy needs. LNG is especially useful when geography, distance or geopolitics limit the ability of a country to receive natural gas via a traditional pipeline. Japan, for example, has very few natural gas resources of its own and pioneered Asia’s LNG import industry from the late 1960s to help maintain energy security.
Research from Wood Mackenzie found that Asia’s demand for LNG would nearly double between 2024 and 2050. A 2025 study by S&P Global Commodity Insights found that LNG from the US, Australia and Qatar – the world’s three biggest exporters – had 47% lower average lifecycle carbon intensity than coal, when used for power generation in Japan, the Philippines and Vietnam.
Where does Asia’s LNG come from?
The 2025 Annual Report of the International Group of Liquefied Natural Gas Importers (GIIGNL) showed that Asia received 18% of its LNG from the Pacific Basin, with 28% coming from the Middle East and 54% coming from the Pacific Basin. The three biggest single sources of LNG imports for Asia in 2024 were Australia (28%), Qatar (22%) and the United States (10%).
Australia has long been the biggest source of LNG for countries like Japan, China and Taiwan and a major supplier to South Korea. The US LNG industry continues to expand rapidly, with growing supply roles across Japan, South Korea, Taiwan, Thailand and India.
Variations of natural gas
In addition to LNG, people may also have seen or heard references to “raw gas” and “compressed natural gas.”
“Raw natural gas” refers to natural gas in its unprocessed state – also known as “wet gas.” When gas is extracted from a well it contains a variety of impurities that are removed via processing before it is used as a fuel. These include natural gas liquids (ethane, propane, butanes and pentanes), condensate and water vapor.
Compressed natural gas (or CNG) is a fuel gas composed of methane (CH4) compressed to 1% of the volume it occupies at standard atmospheric pressure. In contrast to LNG, CNG is stored at ambient temperatures under high pressure. One of its main uses is as a fuel for vehicles, particularly buses. CNG-powered vehicles are widely found in Iran, Pakistan, Argentina and Brazil.
LNG v LPG: what is the difference?
LNG should also not be confused with LPG, which stands for liquefied petroleum gas. While both originate from “wet” natural gas, LNG is mostly made up of methane (CH4), while LPG largely consists of propane (C3H8), n-butane (C4H10) and isobutane.
LPG (via LPG cylinders) is frequently used for domestic cooking and heating in areas without access to piped natural gas and can also be used to fuel motor vehicles (‘autogas’).
