In a seemingly ever-changing global geopolitical landscape, characterised by wars, sanctions, US-centric tariff-based trade policies and countervailing efforts to keep climate-change policies on track, it is crucial to identify how such developments are likely to shape the global gas and liquified natural gas (LNG) markets.

Wood Mackenzie analysts recently took a detailed look at the key developments set to shape the outlook for global gas and LNG through 2050, with a particular focus on Asia. Fill in the form to receive a series of key insights into their findings and read on for a brief introduction to those likely developments on the global front.

LNG demand to outstrip that for gas
There will be two distinct phases to global gas and liquified natural gas (LNG) demand over the next 25 years. Global gas demand is set to grow 15% through to 2035, fuelled by growth in Asia (+33%) and North America (+15%), and despite reductions in Europe (-8%). Thereafter, demand is likely to peak and start declining as growth in China wanes, North American demand plateaus and the slowdown in European demand gathers pace.

Global LNG demand will grow far faster than gas demand over the next decade, increasing by 56%, or 230 mmtpa, as new supply reduces prices further. After that, Chinese growth will flatten out, demand in Northeast Asia and Europe will decline, and South and Southeast Asia will remain the only major engines of growth, alongside LNG bunkering demand. Global LNG demand will rise by just 20 mmtpa in 2035-50.

A risk of global LNG oversupply
With the US Department of Energy pause now lifted, players are positioning for a new wave of US LNG investments, adding to investments in the Middle East, Canada and elsewhere. We expect 108 mmtpa of new LNG supply to take final investment decision by 2027, ensuring a continuous flow of LNG supply growth through 2035.

LNG price volatility will persist in the near term, amplified by geopolitical tensions as availability remains limited. The new supply will bring about a structural change from 2026. European and Asian markets are poised for a period of lower prices environment between 2026 and 2034. With LNG demand growth slowing after 2030, there is an increased risk that US LNG cargo cancellations might be required to balance the market, particularly in 2030-32.

US gas market poised for growth
LNG supply growth, industrial reshoring and the boom in artificial intelligence/data centres will boost domestic requirements by 26% from 2024 to 2040. That’s an increase of 130 bcm from our previous view, as the US administration gets set to turbocharge data-centre development amid a policy shift away from renewables. With US players in key non-associated plays increasingly focused on capital discipline, and with limited long-term gas upside from tight-oil supply, US gas prices are set to rise throughout the forecast period. The Henry Hub price will average around US$1/mmbtu above our previous 2035-50 estimate.

Source: Wood Mackenzie