Natural gas can be brought to the consumer by a fleet of ships with compressed natural gas (CNG) technology. These ships will serve as both storage and transport vehicles discharging directly into the land based gas grid via an on/offshore discharge terminal, an offshore platform or offshore buoys. The new CNG technology does not require the huge investments necessary for LNG production. Nor does the system require long-distance pipelines between the gas field and the consumer. Different proposals for transportation of gas by ship directly from the field to the consumer without the use of costly liquefaction, regasification and storage plants have been evaluated for many years. A new type of ship has been introduced.- a combination of a crude oil tanker and a container ship. It has a large set of vertical pipes, designed according to enhanced pipeline design principles, for the transportation of compressed natural gas. The weight of these pipes is 50% of the weight required by conventional pressure vessel design codes, making possible a large storage volume. Ships have so far been designed to transport up to 33.5 MSm 3 gas on each voyage. The present concept for compressed natural gas was introduced by Knutsen OAS Shipping and has been developed with assistance from Europipe GmBH and Det Norske Veritas. Stranded gas is by definition available gas that cannot be developed economically, either because the volumes are too small to justify LNG production, or because it is too far from the market or existing infrastructure to justify pipelines. The new system is a gas transportation solution that fills the gap between the pipeline and LNG concepts. Economic evaluations show that the new Knutsen PNG® concept will be highly competitive as compared to pipelines and LNG transport for distances of up to 2,500-3,000 nautical miles. The advantage is less investment in infrastructure and greater flexibility. The potential market for CNG carriers is large as more than half of the world's known reserves are associated and stranded gas The paper outlines the key steps in the development process, summarizing the findings of the risk study, the containment design and the qualification testing as input to the development of the new DNV CNG rules that came into force by July 1 st 2003.