Global LNG demand to increase in 2026, while supply increases.
Analysts say that global liquefied gas (LNG), which is a form of natural gas, will increase this year. This will ease the constraints since the Ukraine War in 2022 and lower prices, which may spur demand, including from China and India, who are major importers.
Analysts expect a massive wave of supply to continue until 2029. This will?depress?prices, which could lead to more demand coming from emerging economies.
Kpler said that 2026 will be a year of transition for the LNG industry. The market will move from tightness to ample availability with enough supply, even when winter demand and storage requirements emerge, especially in Europe.
SUPPLY
S&P Global Energy estimates, Kpler, and Rystad Energy predict that at least 35 millions metric tons new capacity will be online in this year. This is primarily coming from the U.S.A. and Qatar.
The global LNG supply could increase by as much as 10% annually, according to the 2026 forecasts of Kpler Rystad ICIS and Rabobank, which range between 460 and 484 millions metric tons.
Golden Pass LNG, located on the U.S. Gulf Coast, and Qatar's North Field Expansion are both expected to produce significant volumes. Corpus Christi LNG and Plaquemines LNG, in the U.S. as well as LNG Canada, and the Greater Tortue Ahmeyim offshore Senegal, and Mauritania, will also be producing more.
Analysts from Rabbobank Rystad Kpler predict a range of Asian spot LNG averages.
Rystad and Kpler forecasted that gas prices in the Netherlands at the "Title Transfer Facility", the European benchmark, would average between $9.50 and $9.74 per million Btu in this year. This is down from an annual average of $14.20.
As gas prices in Europe and Asia are easing, the price spreads between U.S. The benchmark Henry Hub is expected to narrow, which will squeeze U.S. LNG margins, as feedgas prices are on the rise.
CHINA AND INDIA TO DRIVE DEMAND
According to Rystad's, Kpler's and S&P Global Energy's outlooks, Asia’s LNG demand will recover this year by 4 to 7 percent, led by China and India, as lower prices encourage additional spot purchases, fuel switching, and stockpiling.
According to Kpler analyst Nelson Xiong, new contracts will add to the rising imports. The Chinese demand is expected to increase by 6 to 7 million tonnes and Indian demand by 5 to 10 million tonnes.
He said that a large part of the new supply contracted should be consumed domestically.
China's imports in 2025 fell due to a weak industrial demand and U.S. tariffs. Also, the strong supply of domestic gas and piped natural gas. Ole Dramdal of Rystad Energy said that demand this year will rise, but it may still fall short of the 2024 level. Beijing is prioritizing domestic production, so imports are forecast to be 76.5 million tonnes this year.
Dramdal said that a significant?surplus? of China's contracted LNG volume is likely to be remarketed, as long-term contracts for the country are expected at 80 million tons annually. Meanwhile, Turkey, Malaysia, and Taiwan's combined imports will increase by 6.2'million tons' in 2026.
EUROPE ABSORBS SUPPLY
After the full-scale Russian invasion of Ukraine, Europe has become a major driver of global LNG demand.
Kpler predicts that Europe's LNG imports will increase by 22 million tonnes in 2026, while Rystad expects an increase of about 20 million tons. Energy Aspects and ICIS also see increases of approximately 13 million tons. The reasons for this are higher storage injection needs following lower winter inventories, increased domestic gas consumption in the face of lower average TTF prices and growing Turkish demand.
Dramdal said that Europe was poised to absorb the largest share of new LNG supplies, and showed the strongest incremental demand in the near term.
Analysts expect that LNG cargoes from Yamal will find alternate destinations such as Turkey and Egypt while Europe fills in the volumes lost with supply from the Atlantic basin.
(source: Reuters)
