The global liquefied natural gas (LNG) market is entering a period of profound uncertainty. While demand continues to grow, particularly in Asia, a massive wave of new supply from major producers like the United States and Qatar is set to come online. This impending surge raises concerns about potential oversupply, price volatility, and the long-term viability of new LNG projects.
Between 2025 and 2028, the LNG sector is expected to expand its liquefaction capacity by over 40%. Most of this new supply will come from the U.S. and Qatar, while other contributors include Russia, Canada, and Africa. This unprecedented supply growth mirrors the 2017–2020 period, which saw a price collapse due to excess volume.
**40% growth in LNG capacity** (2025–2028 forecast) – **Top suppliers:** U.S., Qatar, Russia, Canada
Demand in Europe, Japan, and South Korea is expected to shrink as these regions invest in renewables and nuclear energy.
Countries like Pakistan and Bangladesh have reconsidered their LNG plans due to high prices and infrastructure limitations.
Example: **Pakistan cancelled LNG power projects**, pivoting toward coal and solar, importing **13GW of solar PV** in H1 2024.
he Ukraine-Russia war has heightened Europe’s reliance on LNG. But economic activity, weather, and storage levels still drive demand volatility.
**2024 year-end:** Possible expiry of Ukraine-Russia pipeline agreement – May boost LNG imports to compensate for lost pipeline gas
New Australian projects face stricter carbon policies and higher costs, threatening global competitiveness.
In January 2024, the U.S. Department of Energy paused approvals for LNG exports to non-FTA countries — delaying **70+ MTPA** of proposed capacity.
85% of recent LNG contracts are 10+ years long and destination-fixed, offering greater predictability for buyers and sellers.
However, flexible terms in U.S. LNG contracts allow cancellations, creating potential underuse of facilities during price dips.
The LNG market is being pulled in multiple directions, expanding supply, policy shifts, and changing consumption patterns. Navigating this landscape will require agility, long-term planning, and balancing fossil fuel needs with the energy transition.
This article is for informational purposes only and does not constitute financial or investment advice. Market conditions may evolve rapidly. Please consult professional advisors for personalized guidance.
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