By Mark Jaffe, EUCI energy writer
The global natural gas market is set to be reshaped in 2026 by a surge of new liquified natural gas (LNG) capacity, which will help lower market prices and spur demand, according to the International Energy Agency (IEA).
The increase in global gas demand slowed to less than 1% in 2025 and gas supplies were tight in the first half of the year leading to higher spot prices. The market was also dampened by weaker industrial demand.
However, throughout the year global LNG supply rose by 7%, easing prices, with three-quarters of the new export capacity coming online in the second half of 2025, the IEA Quarterly Gas Market Report said.
“New LNG capacity coming online in North America was by far the largest driver of the global increase, pushing global LNG supply into double-digit growth in the second half of 2025 and contributing to falling spot prices in both Europe and Asia,” the agency said.
In the U.S., investment commitments were made in 2025 for more than 80 billion cubic meters (bcm) per year of LNG export capacity – a record for the industry – with projects centered on the Gulf Coast in Texas and Louisiana.
“This new wave of projects is expected to further solidify the United States’ position as the world’s largest LNG supplier,” the IEA said. The United States’ share in the global LNG market is projected to increase by the end of the decade to 33% from around 25% in 2025.
The buildout of new capacity saw the largest increase in LNG contract activity in the past decade with130 bcm per year of contracts signed in 2025. The U.S. accounted for about half of all the contracted volume.
While natural gas export demand was up in some markets in 2025, Asia saw declines.
The 26 European counties that are members of the Organization for Economic Cooperation and Development (OECD) posted the largest growth in demand, 3%, in 2025, as more gas was burned in the power sector to offset lower wind and hydropower output.
North America demand was up 1% spurred by a cold winter.
In Asia, demand for gas slowed to its weakest level since 2022 and was relatively flat compared to 2024. China’s LNG demand was cut 14% compared to 2024 by increased domestic production and pipeline deliveries from Russia.
Global LNG supply growth is expected to accelerate again in 2026 by more than 7% – the fastest pace since 2019, with North America accounting for most of the 40 bcm increase.
The rise in in supplies and moderating prices, the IEA said, is expected to lead to a growth in demand of almost 2%, with China and Asia as the main markets.
“The unfolding LNG wave is set to have a central role in shaping global gas markets in the coming years, likely putting downward pressure on prices and improving liquidity as regional gas markets become increasingly interconnected,” Keisuke Sadamori, IEA director of energy markets and security, said in a statement.
Beyond market dynamics geopolitical and policy shifts – including market reforms in Asia and a decision by the European Union to phase out Russian gas imports by November 2027 – will affect international gas flows.
“A range of risk factors remain – including geopolitical tensions and weather conditions – as the volatility in natural gas markets in early 2026 has highlighted,” Sadamori said. “In these uncertain times, continued vigilance on energy security is essential.”
Processing…please wait
