Trump's policies and European demand will tighten the global LNG market by 2025.
The global market for liquefied gas could be tighter this year, as the rising demand in Europe intensifies competition between Asia and North America and offsets new North American supplies at a moment when President Donald Trump’s energy policies and tariffs are also being closely watched.
Energy Aspects, a consultancy, said that Europe's LNG consumption is expected to increase by over 14 million metric tones to 101 million tones in 2025 as it replenishes storage facilities for gas and replaces lost supplies after the Russia-Ukraine transit agreement expired at the end last year.
Alex Froley, ICIS analyst, said that Europe's need to replenish storage after a colder Winter and further Russian supply cuts will make it more competitive for cargoes this year.
He estimated that Europe's storage capacity is 17 billion cubic meters (bcm), or about 15 billion cubic metres per year, lower than it was in 2024. The loss of Russian gas flowing through Ukraine has also reduced the supply by 15 bcm each year.
Froley stated that there is enough LNG on the market for this purpose, but at a cost.
ASIA'S GROWTH SLOWS
According to Energy Aspects and Kpler's report, higher spot prices may slow Asia's LNG growth this year to just over 2%, down from the 6% it was in 2024, when heatwaves increased cooling requirements. This would put 2025 LNG demand at about 280 million tonnes.
Rabobank predicts that the average Asia spot LNG price will be $12.65/million British thermal units (mmBtu), up from $11.97/mmBtu by 2024.
James Taverner is the senior director for global gas and LNG at S&P Global Commodity Insights. He expects a modest growth in demand on price-sensitive markets of south and southeast Asia, as oil prices may trend lower.
TRUMP DRIVES NORTH AMERICAN SOURCES
This year, global supplies will be boosted by projects such as the US Corpus Christi LNG Phase 3 and Plaquemines LNG in the United States. LNG Canada, Mexico’s Energia Costa Azul LNG, and the Mauritania/Senegal Greater Tortue LNG project are also part of the list.
Energy Aspects analyst Jake Horslen said that while the nameplate capacity of the first three engines is high, they won't reach their maximum output until later this year or in 2019.
He said that global LNG exports will rise by 18 million tons, to 4106 million tons, in 2025. Europe is expected to absorb the majority of this new supply, and to suppress demand elsewhere. Trump has already lifted a moratorium on LNG export permits. Sources have also suggested that he may make renewals more convenient. He has also warned of tariffs against goods imported from China, the top LNG importer. Analysts say Beijing could respond by retaliating and targeting U.S. LNG as it did last year.
Froley, of ICIS, said that China could increase its imports from Australia and the Middle East while increasing U.S. exports could be sent to Europe.
Go Katayama, a Kpler analyst, says that Trump's proposed tariffs may also hurt U.S. projects for LNG by raising the cost of raw materials such as steel, machine components, and modular liquefaction train modules.
(source: Reuters)
