To calculate LNG prices in USD per metric tonne ($/MT or $/mt), prices are generally converted from euros per megawatt-hour (€/MWh) or USD per million British thermal units ($/MMBtu) to USD per metric tonne — i.e. from energy basis to mass basis — using a higher heating value (HHV) in either MWh/MT or MMBtu/MT.

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What is the higher heating value (HHV)?

The higher heating value (HHV) of a fuel — also called the gross calorific value (GCV) or gross energy — is the total amount of heat released when a specified quantity of the fuel is completely combusted and the combustion products are cooled back to the original temperature (usually 25 °C), including the heat recovered from condensing any water vapor formed during combustion.

It represents the maximum usable energy content of a fuel if all heat, including that from water condensation, can be utilized.

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Why use higher heating value for LNG price conversions?

Energy content consistency
HHV includes the total energy released during combustion, including the latent heat of vaporization of water formed. This represents the gross energy content of the fuel, which is the standard for LNG pricing and commercial contracts.

Industry pricing convention
Leading LNG industry entities explicitly use HHV for LNG price conversion.

Avoiding underestimation
Using lower heating value (LHV), which excludes the latent heat of vaporization, can underestimate the energy content and lead to inconsistent or inaccurate cost calculations.

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Converting from €/MWh to $/MT (& $/MWh to $/MT)

The HHV used to convert LNG prices from €/MWh (energy basis) to $/MT (mass basis) is 15.28 MWh/MT, which can be derived from an HHV of 55.0 MJ/kg using the conversion formula below.

The HHV of 15.28 MWh/MT is then included in the formulas below to convert the LNG price from €/MWh to $/MT, using either the USD/Euro or Euro/USD exchange rate.

Note: To convert LNG prices from $/MWh to $/MT (i.e. without an exchange-rate conversion), the formula below is used.

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Converting from $/MMBtu to $/MT

The HHV used to convert LNG prices from $/MMBtu (energy basis) to $/MT (mass basis) is 52.1 MMBtu/MT, calculated using the figures below within the formula shown.

1 MWh = 3.412 MMBtu
LNG HHV = 15.28 MWh/MT

The HHV of 52.1 MMBtu/MT is then included in the formula below to convert the LNG price from $/MMBtu to $/MT.

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LNG: Energy Equivalent Content

Energy Equivalent Content is the amount of one fuel that contains the same usable energy as a specified amount of another fuel. It allows comparison of different fuels based on their energy content rather than their mass or volume.

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LNG MGO equivalent price (LNG-MGOe)

The LNG MGO equivalent price (LNG-MGOe) is the cost of LNG required to provide the same amount of energy as contained in one metric tonne of marine gasoil (MGO).

The Energy Equivalent Content of 1 MT MGO is 0.8148 MT of LNG. This means that LNG has a higher energy density per unit mass compared to MGO and that 0.8148 MT of LNG contain the same amount of energy as 1 MT of MGO.

The energy equivalence factor of 0.8148 MT of LNG per 1 MT of MGO is derived by dividing the HHV of MGO, 12.45 MWh/MT, by the HHV of LNG, 15.28 MWh/MT, as shown in the formula below.

Then, to calculate the LNG MGO equivalent price, multiply the LNG price in $/MT by 0.8148, as shown below.

This means that to get the same energy content as 1 MT of MGO, you would pay $684.76 if buying LNG at $840.4/MT.

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LNG VLSFO equivalent price (LNG-VLSFOe)

The LNG VLSFO equivalent price (LNG-VLSFOe) is the cost of LNG required to provide the same amount of energy as contained in one metric tonne of VLSFO.

The Energy Equivalent Content of 1 MT VLSFO is 0.7919 MT of LNG. This means that LNG has a higher energy density per unit mass compared to VLSFO and that 0.7919 MT of LNG contain the same amount of energy as 1 MT of VLSFO.

The energy equivalence factor of 0.7919 MT of LNG per 1 MT of VLSFO is derived by dividing the HHV of VLSFO, 12.1 MWh/MT, by the HHV of LNG, 15.28 MWh/MT, as shown in the formula below.

Then, to calculate the LNG VLSFO equivalent price, multiply the LNG price in $/MT by 0.7919, as shown below.

This means that to get the same energy content as 1 MT of VLSFO, you would pay $665.51 if buying LNG at $840.4/MT.

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LNG IFO 380 equivalent price (LNG-380e)

The LNG IFO 380 equivalent price (LNG-380e) is the cost of LNG required to provide the same amount of energy as contained in one metric tonne of IFO 380.

The Energy Equivalent Content of 1 MT IFO 380 is 0.7598 MT of LNG. This means that LNG has a higher energy density per unit mass compared to IFO 380 and that 0.7598 MT of LNG contain the same amount of energy as 1 MT of IFO 380.

The energy equivalence factor of 0.7598 MT of LNG per 1 MT of IFO 380 is derived by dividing the HHV of IFO 380, 11.61 MWh/MT, by the HHV of LNG, 15.28 MWh/MT, as shown in the formula below.

Then, to calculate the LNG IFO 380 equivalent price, multiply the LNG price in $/MT by 0.7598, as shown below.

This means that to get the same energy content as 1 MT of IFO 380, you would pay $638.54 if buying LNG at $840.4/MT.

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See also:

    Crude price conversion

    Price calculation