Liquefied natural gas (LNG) is known as 'green fuel' used in power plant, automobile and so forth due to its higher energy density and environmentally friendly advantages. LNG, besides its high quality chemical exergy. has plenty of physical exergy such as cold exergy and pressure exergy, which could be utilized further. Analysis of physical exergy and its affected factors has been conducted. Based on the analysis, several cycles used for recovering and applying the physical exergy of LNG, such as combined power cycle, gas turbine power generation cycle and automobile air-conditioning system have been proposed. The parameters affecting the performance of the cycles are discussed. The recovery and utilization of physical exergy of LNG are the important measures to save energy and protect the environment. Copyright (C) 2005 John Wiley Sons, Ltd.