Mixed refrigerant (MR) systems are widely employed in natural gas liquefication processes due to the advantage of efficient heat transfer over pure refrigerants. An exergy destruction reduction (EDR) algorithm is proposed to optimize MR composition for energy-efficient natural gas liquefication. Exergy destruction associated with heat transfer is graphically depicted and area of the exergy destruction graph is minimized under the constraint of the minimum internal temperature approach in the heat exchanger. The EDR optimization is performed by directionally regulating individual refrigerant component responsible for decreasing the graphic exergy destruction. The C3MR process is modeled in Aspen HYSYS and the MR systems for the cryogenic heat exchangers are optimized by the programmed EDR solver run in Matlab. The EDR optimization results in 0.2515 kWh.kg(-1) specific compression work with 17.7% power consumption savings as compared with the base case. In addition, the exergy destruction rate obtained from the EDR algorithm is 2.9% lower than that from the sequential quadratic programming (SQP) algorithm. The EDR algorithm based on the thermodynamic laws is efficient for optimization of liquefaction processes involving the use of MR system. (C) 2018 Elsevier Ltd. All rights reserved.