The emergence of Floating Storage and Regasification Units (FSRUs) is often seen as a more flexible solution for storing and distributing LNG.
But does this mean that land-based LNG terminals are no longer efficient, or even unnecessary? Let’s take a closer look.
What Is an LNG Terminal and What Does It Do?
LNG terminals are vital facilities connecting gas-producing regions with global consumer markets. There are generally two main types:
- Liquefaction terminals: located near gas fields, cool the gas to -162°C to convert it into LNG, reducing its volume by 1/600th so it can be transported by ship.
- Regasification terminals: located near markets, receive LNG, store it in cryogenic tanks, and then reheat it to gas for distribution to consumers (power plants, industry, and households).
Without these two types of terminals, large-scale LNG trading would be impossible, as there would be no facilities capable of liquefying, storing, or reconverting the gas for consumption.
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The Key Role of LNG Terminals in the Global Supply Chain
LNG terminals play a fundamental role in maintaining the continuity of the global energy supply, connecting LNG production with the global market and ensuring supply stability and reliability.
Here, liquefaction terminals will serve as the starting point for the global supply chain, converting local gas into LNG for export. Meanwhile, regasification terminals will serve as a supply buffer in consumer markets, providing strategic reserves and ensuring energy stability.
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Are Land-Based LNG Terminals Still Efficient in the Modern Era?
Yes, onshore LNG terminals remain efficient and even crucial today, for several reasons.
Comparing with Floating Technologies (FSRU/FLNG)
FSRUs excel in flexibility, faster deployment, and lower upfront capital costs (CapEx). However, these advantages are especially suited for short-term projects, remote locations, or emergency solutions.
By contrast, land-based terminals offer much larger storage capacity and support long-term operations. Their economies of scale make operating costs (OpEx) per unit of gas generally lower over time.
Long-Term Benefits and Energy Security
Although more expensive to build, land-based terminals are long-term investments that provide permanent energy stability. They not only support power generation and industry but can also serve as regional LNG distribution hubs.
Moreover, they have the potential to integrate with future technologies such as Carbon Capture and Storage (CCS), something that is much harder to apply to floating facilities. This makes them a key pillar in decarbonization strategies.
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Challenges and New Efficiency Opportunities
The biggest challenges for land-based terminals are their high costs and lengthy construction times. But these hurdles are driving innovations. Modern terminals are now being designed to:
- Improve energy efficiency
- Reduce emissions
- Integrate carbon capture and storage technologies
In addition, onshore terminals are increasingly being developed into multi-functional hubs that can process gas into hydrogen or ammonia, further supporting long-term energy transition goals.
Ultimately, land-based terminals remain the backbone for large-scale projects thanks to their stability and capacity, while FSRUs bring flexibility and speed.
The two are not competitors but complementary partners in the global LNG supply chain, ensuring that energy remains both reliable and adaptable to changing needs.
References:
- German LNG. Accessed 2025. How does an LNG terminal work?
- U.S. Department of Energy. Accessed 2025. Liquefied Natural Gas (LNG)
- ESDM. Accessed 2025. PLN, Dewata Energy Sign MoU on LNG Terminal
