Small-scale LNG producer Stabilis Solutions Inc. expects the fuel’s use in commercial rocket launches to rapidly expand over the next several years, creating more demand and incentives to grow its liquefaction capacity.

Houston-based Stabilis recently disclosed it expects demand for high-purity liquefied natural gas to grow 40% year/year in 2024 as the pace of rocket launches in the United States increases. That growth in demand could mean the aerospace sector could make up 10% of its LNG sales volumes by the end of the year, according to management.

By 2029, commercial space flight companies could use around 25 million gallons a year of LNG, executives said. Stabilis currently supplies around 40% of the LNG volumes used in rocket launches and is looking for ways to expand its...