Global LNG market expected to grow in production and demand over next several years — Bernstein

The global liquefied natural gas (LNG) market is at an inflection point after years of tight supply and slow demand growth. Bernstein predicts that 2025 will be the start of the turnaround, thanks to increased production capacity and a rebound in consumption.

The firm expects global LNG demand to grow 4.5% to 412 million tons in 2025, driven by a surge in Asia and Europe. Consumption could increase by another 8% in 2026. Between 2025 and 2027, production of the fuel will grow by 130 million tons, or 33% of its current volume. Some new plants are already in operation.

Despite the increase in supply, LNG prices remain high, hovering between $13 and $14 per million British thermal units. Bernstein expects the average price to be $12 in 2025, falling to $8 in 2026. If the market can't absorb the wave of new supply, prices could end up at $5-6. This could lead to production shutdowns, especially in North America.

A potential return of Russian fuel supplies to Europe remains the biggest risk to gas prices, Bernstein says.