LNG terminal
Site that liquefies gas for export or regasifies it on arrival; value is concentrated in a few cryogenic trains, making it as much a business interruption risk as a property one.
At minus 162 degrees, natural gas turns liquid and takes up about six hundred times less space: which is why LNG exists. A liquefaction terminal cools the gas in trains, each dominated by a large cryogenic heat exchanger, stores it in double-walled tanks, then loads it onto carriers. A receiving terminal does the reverse, from tank to grid. The underwriter looks first at concentration. One train represents several billion dollars of investment, and the exchangers have replacement lead times counted in years. The direct damage (fire, vapor explosion, tank rupture) is bounded by replacement value; business interruption depends on the gas price and the length of the stop, and it balloons when the market runs hot. Freeport LNG, June 2022: a pipe rupture, no casualties, and eight months of downtime at a site that carried a notable share of US exports. Add the perils peculiar to coastal installations (swell, earthquake, lightning) and a dependency risk: the terminal only works if gas arrives and carriers can berth. Access and control-system security belongs in the same review, since an intrusion into a SCADA system can trigger a safety shutdown.
Textbook case: a three-train liquefaction terminal of 4 million tonnes a year each suffers a heat exchanger fire on one train. Damage is 300 million dollars. The train is down 11 months, and margin lost on a third of capacity reaches 480 million. Business interruption then exceeds the damage, which the policy's indemnity period must anticipate at underwriting.
LNG terminal, LNG terminal insurance, liquefaction plant, regasification terminal, LNG facility insurance
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