LNG vs LPG: Procurement Differences for First-Time Buyers

The basic difference

• LNG (Liquefied Natural Gas) is methane cooled to -162°C. Shipped in specialized cryogenic carriers. Re-gasified at destination.
• LPG (Liquefied Petroleum Gas) is propane and/or butane held under pressure at ambient temperature. Shipped in standard pressurized tankers.

They are not interchangeable as fuel and they are not interchangeable as procurement.

LNG market structure

LNG trades on long-term offtake contracts (15–25 years) plus a growing spot market. Spot pricing references JKM (Japan-Korea Marker) for Asia and TTF (Title Transfer Facility) for Europe. Spot cargoes are 60,000–180,000 m³ — large, expensive, and tightly scheduled.

A walk-in buyer cannot generally access LNG without a regasification slot at an import terminal, which itself is allocated months in advance.

LPG market structure

LPG is a smaller, more flexible market. Cargoes range from a few hundred tons to 80,000 tons (VLGC vessels). Pricing references Mont Belvieu (US), Saudi CP (Middle East), and northwest European propane benchmarks.

LPG retail and small-bulk procurement is much more accessible than LNG.

What scams to watch

LPG is occasionally sold as "LNG" by deliberately confused intermediaries. They are not the same; the price difference between them is massive and a "discount LNG" offer is almost always actually LPG (or fraud).

What to demand

• Specific cryogenic terminal (LNG) or pressurized terminal (LPG)
• Tank or vessel allocation in writing
• Pricing benchmark explicitly stated (JKM, TTF, Mont Belvieu, Saudi CP)
• Inspection regime appropriate to the product