Global Natural Gas & LNG Market: In-Depth Summary

U.S.–China LNG Trade and Tariff Disruption

• U.S. LNG exports to China were on track to reach ~12.5% of U.S. total exports by 2028, but tariffs halted this trajectory.
• China’s imports from the U.S. were expected to reach 15% of their LNG intake; this growth has now stopped.
• However, the cargoes are not wasted—they are rerouted primarily to Europe, demonstrating LNG’s flexibility in global trade.
• The impact on U.S. production is minimal given the sheer scale of its output; LNG exports to China were only a tiny fraction of total U.S. production.

China’s Energy Pragmatism

• China produces over 60% of the gas it consumes and continues investing in import terminals and pipeline deals (e.g., Power of Siberia from Russia).
• Chinese energy policy prioritizes availability and cost over climate rhetoric. LNG is a component of a broader, diversified supply portfolio that includes coal and nuclear.

LNG Export Approvals and Market Timing

• The U.S. government’s “pause” on new LNG project approvals (under Biden) unintentionally benefited developers by preventing oversupply and giving them time to mature project proposals.
• Market participants did not view this as a true ban but rather a beneficial breather to avoid flooding the market in the late 2020s.

Strategic Chokepoints and Logistics Scenarios

• Simulations modeled the closure of the Panama Canal, Suez Canal, and Strait of Hormuz:
  • Panama and Suez disruptions increase costs but do not halt trade.
  • Closure of Hormuz would significantly affect supply, particularly from Qatar, though the threat remains low.
• LNG trade routes remain adaptable but sensitive to conflict and geography.

U.S. Supply Resilience and Domestic Demand Growth

• U.S. production remains strong, aided by abundant shale and associated gas from oil extraction—often leading to near-zero or negative prices in West Texas.
• Domestic demand is being reinforced by the expansion of AI-driven data centers and industrial applications, especially in areas where renewable capacity is lagging.

Europe’s Sticky Gas Demand

• Europe’s consumption has not declined as much as transition forecasts assumed.
• Demand rebounded after initial conservation efforts post-Ukraine crisis; a rapid phaseout of gas is unlikely without radical infrastructure change.
• Public tolerance for persistently high energy costs is eroding, challenging the EU’s aggressive net-zero goals.

Hydrogen: Promise with Practical Limits

• Green hydrogen remains economically non-competitive without heavy subsidies and carbon pricing.
• The industry lacks a customer base willing to buy hydrogen at viable prices, despite European aspirations.
• Many hydrogen projects are being shelved as feasibility concerns mount.

LNG Capacity Expansion and Price Outlook

• A surge in LNG capacity is expected by 2030, likely leading to short-term price softness.
• Beyond that, constrained new supply growth combined with steady demand could result in a price uptrend post-2032.
• No new LNG export projects reached final investment decision (FID) in 2025, indicating caution from developers.

Emerging Demand Centers: Africa and South Asia

• Africa, while rich in resources, remains hampered by political instability and poor investment environments.
• South Asia—especially India and Vietnam—is becoming a hotspot for future gas demand, driven by industrial growth and a shift from coal.
• African demographic growth will make it a long-term energy consumption force if infrastructure and governance improve.

Energy Transition: Idealism Meets Reality

• Net-zero 2050 goals appear increasingly implausible under current economic and technical constraints.
• Declining political will and public fatigue in developed economies are pushing decarbonization timelines further out.
• The full system costs of renewables—including storage and grid expansion—are undermining claims of their low cost.

Final Thoughts from the Panel:

• Natural gas is not going away, it is becoming a bridge fuel for a longer period than initially expected.
• There is significant regional diversity in how gas is consumed, valued, and integrated.
• Scenario modeling tools are essential in evaluating future market paths, especially under geopolitical uncertainty.
• Policy volatility (e.g., tariffs, bans, subsidies) significantly affects investment timing and market confidence.
• The global LNG market is resilient, adaptive, and increasingly essential to meeting both industrial and transitional energy needs.

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