According to the latest forecasts from multiple institutions, as new production capacity comes online, liquefied natural gas (LNG) supply will shift from tight to relatively ample by 2026, ushering in a new round of “buyer's market” globally. Given the overall slowdown in demand growth, prices are expected to decline accordingly. However, falling prices will stimulate increased purchases from major importers like Asia. Coupled with Europe replenishing inventories during this low-price window to prepare for the upcoming heating season, demand is likely to see a modest boost. Overall, constrained by geopolitical risks and slowing economic growth, demand growth will remain limited. This wave of LNG supply expansion is projected to persist until 2029.

New Capacity Release Exerts Downward Pressure on Prices

According to the latest forecasts from S&P, Kepler, and Rystad Energy, at least 35 million tons per year of new LNG capacity will come online globally in 2026, primarily from the United States and Qatar. Global LNG supply is projected to reach 460 million to 484 million tons, with an annual growth rate potentially as high as 10%.

The International Energy Agency (IEA) notes that between 2025 and 2030, projects under construction or with final investment decisions will bring nearly 300 billion cubic meters of new LNG capacity online annually. The world is poised to experience its largest wave of LNG capacity growth to date. The Golden Pass LNG project on the Gulf Coast and the expansion of Qatar's North Field will be the primary sources of this increase. The Golden Pass LNG project is expected to begin operations in mid-2026, while the North Field expansion is projected to be completed by 2028. Additionally, the Corpus Christi LNG and Plaquemines LNG projects in the United States, the LNG Canada project in Canada, and the offshore GTA project in Senegal and Mauritania will also contribute to increased production.

The U.S. Energy Information Administration (EIA) noted in its latest Short-Term Energy Outlook that U.S. LNG exports will grow by 26% in 2025 and continue expanding through 2027, though at a slower pace.

Rystad Energy projects that U.S. annual LNG production will rise from 105.4 million tons in 2025 to 208.4 million tons by 2031, peaking at approximately 244 million tons over the following decade.

Reuters believes that supply growth will suppress prices. In 2026, the average spot LNG price in Asia is expected to range between $9.90 and $12.45 per million British thermal units (MMBtu). The European benchmark price, the Dutch TTF natural gas price, is projected to decline to between $9.50 and $9.74 per MMBtu, below the 2025 average of $14.20 per MMBtu.

Goldman Sachs recently lowered its 2026 Henry Hub natural gas price forecast to $3.75 per million British thermal units (MMBtu), while maintaining its 2027 forecast at $3.80 per MMBtu.

While the market widely warns of LNG oversupply, producers like Qatar and the UAE maintain that future energy demand remains robust, emphasizing insufficient medium-to-long-term supply investments.

Robust Demand in Asia and Europe

Asia has long been a robust LNG demand market. Kepler data indicates that 64% of global LNG exports will flow to Asia in 2025. Driven by spot purchases spurred by lower prices, fuel switching, and inventory replenishment, Asian LNG demand is projected to grow by 4%–7% in 2026, with India emerging as a key growth driver. Kepler forecasts India's LNG demand will expand by 5-10 million tons in 2026.

Europe will also continue absorbing new supply. Since the Russia-Ukraine conflict erupted, Europe has become a key driver of global LNG demand. Oilprice.com notes EU LNG imports will surge 25% in 2025, with annual imports from the U.S. soaring by 60%. Currently, Europe is the largest market for U.S. LNG, accounting for over 50% of U.S. LNG exports. Russia remains Europe's second-largest LNG supplier, with imports also hitting record levels in 2025.

Kepler estimates that Europe will import over 100 million tons of LNG in 2025. European LNG imports are projected to increase by 22 million tons in 2026, reaching approximately 145 million tons. Rystad Energy indicates that Europe is poised to absorb substantial new LNG supply, demonstrating robust incremental demand in the short term. LNG imports are projected to increase by approximately 20 million tons in 2026, primarily driven by higher injection volumes due to winter inventory depletion and increased regional consumption spurred by falling natural gas prices.

In July 2025, the U.S. and EU reached a historic trade agreement committing the EU to purchase $750 billion worth of U.S. energy products over three years, including LNG, crude oil, and nuclear fuel. However, foreign media reported on January 22 that the European Parliament decided to indefinitely suspend deliberations on follow-up legislation for the U.S.-EU trade agreement.

It is important to note that European industrial activity remains sluggish, as does economic growth—both key drivers of LNG demand. This suggests that European LNG demand may not see more significant growth.

Emerging LNG Corridor in Africa Takes Shape

Notably, Africa is also poised to become a key pillar of LNG supply, with an emerging LNG corridor in sub-Saharan Africa gradually taking shape. Industry insiders believe that sub-Saharan Africa, which holds over 70% of Africa's recoverable resources, is surpassing the continent's traditional natural gas hubs—Egypt, Algeria, and Libya—to drive most future production growth.

Oilprice.com data compilation indicates that LNG exports from sub-Saharan Africa are projected to surge from 35.7 billion cubic meters in 2024 to 98 billion cubic meters by 2034—a nearly 175% increase.

The GTA project will be a key highlight. Relying on the giant cross-border offshore gas field Greater Tortue Ahmeyim, with estimated potential recoverable reserves exceeding 15 trillion cubic feet, the project commenced initial gas production in January 2025 and shipped its first LNG vessel in April of the same year, making Mauritania and Senegal LNG exporting nations. Upon full commissioning of Phase I, Greater Tortue Ahmeyim is projected to produce approximately 2.3 million tons annually. Phase II will add 2.5 to 3 million tons of annual capacity, with the final investment decision pending and construction expected to commence in early 2028. The Rovuma LNG project in Mozambique is equally significant, targeting an annual capacity of 18 million tons. A final investment decision is anticipated in 2026, with LNG shipments and steady production expected by 2030.

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