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LNG cold and cryogenic recovery: Economics and contracts

It pays only with a cold buyer next door

What this tab covers Economics and commercial structures: levelised cost of the recovered energy against the fuel it avoids, host-site risk, and service models such as heat-as-a-service.

Cold recovery pays where a buyer for cold sits next door; liquid air storage is still capital-heavy and benefits most from free LNG cold or waste heat.

Levelised cost of heat or avoided cost

Mixed

The clearest avoided cost is electricity: halving the power used by an air separation unit, whose main cost is compression, is a direct saving. For LAES, a 2025 critical review puts the payback of standalone systems at around 20 years but 3 to 10 years for hybrid systems that use external cold or heat such as LNG. Highview's Carrington plant raised GBP 300 million in 2024 for 300 MWh, about GBP 1,000 per kWh or GBP 6,000 per kW (calculated); total investment had reached GBP 377 million by February 2025, about GBP 1,260 per kWh (calculated, assuming it all goes to Carrington).458

LAES payback, standalone about 20 years4 LAES payback, hybrid about 3-10 years4 Carrington funding GBP 300 million (USD 379 million)5 Implied capex about GBP 1,000-1,260/kWh (calculated)58

Host factory credit risk

Mixed

The host is the LNG terminal operator, typically a strong credit (in India, Petronet LNG at Dahej). The risk is utilisation: if LNG imports fall because of high prices, more domestic gas, or electrification, cold supply falls with them.6

Dahej capacity 22.5 Mtpa6

Heat-as-a-service and ESCO models

Mixed

In Japan the terminal owner has often kept the cold users in-house: Osaka Gas runs air separation units at its Senboku terminals. Highview Power was financed by the UK Infrastructure Bank and Centrica and plans four 2.5 GWh plants needing about GBP 3 billion, starting at Hunterston in Scotland; liquid air was not among the technologies in Ofgem's June 2026 minded-to list for long-duration storage cap-and-floor support, which weakens its revenue floor. India's National Centre for Cold-chain Development has studied selling LNG cold to cold stores, which would be a cold-as-a-service contract.35810

Highview pipeline four 2.5 GWh plants, about GBP 3 billion5 Ofgem LDES window 1 (June 2026) 16 projects; none liquid air10

Sources

  1. Cold energy extracts value from the LNG supply chain (trade report, 2016) Riviera Maritime Media, 2016
  2. Liquid air energy storage: A critical review (She et al.), Renewable and Sustainable Energy Reviews 208 Elsevier (via RePEc IDEAS), 2025
  3. Energy stored as liquefied air: GBP 300m investment triggers construction of UK's first commercial-scale plant The Chemical Engineer (IChemE), 2024
  4. Petronet LNG Limited Dahej Terminal Capacity Expands to 22.5 MMTPA Tank Terminals (relaying Petronet LNG announcement), 2026
  5. Energy storage innovation powers Highview scale-up UK Research and Innovation, 2025
  6. Ofgem boosts long duration storage to secure more homegrown energy for customers Ofgem, 2026