The Global LNG Market To See Many Liquefaction Projects Go Online

Energy and Power

Starting late 2024, the global LNG market is set to enter a phase of rapid expansion, driven by a wave of new liquefaction projects. According to IEEFA, LNG production capacity is expected to grow by around 193 million tonnes per annum (MTPA) between 2024 and 2028. That’s a jump from roughly 474 MTPA at the start of 2024 to 666.5 MTPA by the end of 2028 a 40% increase in just five years. It’ll be the fastest growth the LNG industry has ever seen.

• That said, the supply surge won’t be immediate. 2024 only about 12 MTPA of new liquefaction capacity is expected to come online, with early cargoes already shipped from projects in the Republic of Congo, Mexico, Russia, Mauritania/Senegal, Australia, and the U.S. But by late 2024 or early 2025, things will ramp up quickly. IEEFA projects 37 MTPA of new capacity in 2025, 57 MTPA in 2026 the highest ever in a single year followed by 44 MTPA in 2027 and 43 MTPA in 2028.
• On the demand side, things are less optimistic. The weak demand growth and this upcoming wave of new supply could push the global LNG market into oversupply by 2026. LNG prices, which soared after Russia’s invasion of Ukraine disrupted European gas supplies, have dropped due to waning demand from developed economies.
• In Japan, LNG demand dropped 8% in 2023 and is down 20% since 2018. South Korea saw a nearly 5% drop last year and expects a 20% cut by the mid-2030s. Europe’s LNG imports have stagnated, with gas use falling 20% in the past two years. IEEFA expects European demand to peak by 2025 and then start declining.
• Emerging Asian markets, once seen as LNG growth engines, are now scaling back plans due to high costs and logistical hurdles many are shifting focus to renewables. So, while global supply is charging ahead, demand might not keep up.