Global LNG Demand Slows: U.S. Builds Overcapacity - says Reuters and Refinitiv
- Anonymous
- 42 minutes ago
- 2 min read
Global LNG capacity is projected to grow by 60% by 2030, with the U.S. expected to contribute half of that growth. The Corpus Christi LNG terminal, operated by Cheniere Energy, is rapidly emerging as a cornerstone of the U.S. liquefied natural gas export boom. This rapid expansion could lead to a significant oversupply, meanwhile, domestic U.S. gas prices face upward pressure due to slower deployment of renewables and rising electricity demand driven by data centers (Reuters, Refinitiv).
Why This Matters
Weak Asian demand moves cargoes to Europe and pressures global spot prices (Reuters, 2025).
More U.S. exports raise the risk of seasonal oversupply and tighter margins for sellers (Refinitiv).
High inventories in South Korea and cautious Chinese buying reduce winter upside (Reuters, 2025).
Shipping economics and carrier type now decides which basin wins flexible spot cargoes (Refinitiv).
LNG Prices Subdued
In 2022, the market saw a sharp price spike due to Russia's war against Ukraine. Since then, prices have eased and the global market has rebalanced. Figure 2 shows that, from 2023, Northeast Asian delivered LNG has largely tracked the Dutch TTF. That means Europe’s gas price swings now set the tone for Asia when Asian demand stays weak.
On the supply side, U.S. liquefaction has kept growing. New output from Plaquemines and the Corpus Christi Stage 3 expansion has added monthly cargoes into the Atlantic, shown in the U.S. exports bar chart.
China and South Korea illustrate the demand change. China’s recent receipts dropped sharply compared to last year, and South Korea’s inventories likely sit near full after heavy summer receipts. Both countries have less room to absorb extra shipments this winter, limiting the chance of a big price rebound.
Action Items
Investors: Re-run project valuations using a base case of flat-to-lower prices and higher Atlantic supply as the market is trending towards significant oversupply.
Companies (traders/terminals): Prioritize flexible routing and consider the prices of renewable energy as it impacts future demand characteristics for LNG.