The capital costs of natural gas hydrate (NGH) and liquified natural gas (LNG) are compared, for the transport of 400 MMscf/d (about 4 billion Sm3 per year) of natural gas for a distance of 5500 km. The NGH chain was found to cost at least one-quarter less than the LNG chain. Independent studies in Norway, Canada and Russia have shown that frozen hydrates at atmospheric pressure remain stable long enough to make long-distance transport of natural gas in the form of hydrate technically feasible.

The demand for natural gas in the world is increasing. Two regions are expected to continue to dominate the increase in gas demand; Europe and Asia Pacific (Commichau 1994, MeIIbye 1994, Voigt 1994). Large natural gas resources, however, are not located near the main population centers in the two regions. The transportation of natural gas over increasingly longer distances will consequently be required in Europe and Asia Pacific. The development of the natural gas industry in the next 5-15 years is 1ikely to be dominated by costs, as evident from statements by Exxon's Voigt "The industry must continue to reduce project costs, keep gas competitive, and obtain prices in line with full market value" by Mobil's Commichau "The gas industry faces tremendous challenges, which are mainly of an economic nature" and by Statoil's MeUbye " … that increasing volumes have to be transported over increasing distances … can only be profitable if costs are reduced and prices are increased." Large-scale transport of natural gas is done in pipelines and by ship in liquified form. The cost of natural gas transport is such that pipelines are used for distances up to a few thousand kilometers, while transport of liquified natural gas (LNG) by ship is used for greater distances.