In the past, gas critics alleged that promoting gas as a “transitional fuel” would prolong the life of the fossil fuel industry and be detrimental to the environment. Now, companies and governments are re-evaluating gas opportunities, especially liquefied natural gas.
Investments have been pouring into LNG, triggered by Russia’s 2022 invasion of Ukraine, which expedited Europe’s shifts away from Russian pipeline gas. China, the world’s largest natural gas importer, has doubled down on its plan to increase gas use, while also increasing renewable energy capacity. Finally, Trump’s second administration has also facilitated an accelerated pace for international companies and private funds to invest in U.S. LNG.
New Trend Takeoff
The new growth trend is just getting started. According to the latest estimates and industry forecasts, global gas demand reached record levels in 2024 at roughly 3,900 billion cubic meters. Average annual global gas demand will increase roughly 1 percent to reach 4,550 billion cubic meters by 2040.
To meet rising demand, many countries are increasing domestic gas exploration and production. Estimates believe these efforts will supply about one third of the demand growth, with the other two thirds supplied by new LNG supply and pipeline gas trade.
In 2024, global LNG trading reached a record high of 407 million tonnes, led by demand growth from China and India. By the end of 2024, 44 countries had become LNG importers, with eight more countries constructing LNG import facilities.
Going forward, experts estimate the annual growth rate for LNG will increase 3.2 percent to reach about 680 million tonnes by 2040, led by China, India and the rest of Southeast Asia. It will also continue to be fueled by shifts in Russian gas pipeline supply to Europe: Russian pipeline gas supply to Europe is down roughly 67 percent since the start of the war in 2022. At the beginning of 2025, Ukraine decided to stop all Russian pipeline gas exports to Europe. This decision will increase Europe’s LNG demand by roughly 15 billion cubic meters, or 10 million tonnes per annum.
The Trump Factor
According to Shell’s Global LNG Outlook 2025, the United States will become a significant contributor in helping the world meet 60 percent of the LNG demand increase between now and 2040. Even before Trump took office, the U.S. Department of Energy ended former President Biden’s LNG pause and resumed processing LNG export permits to non-Free Trade Agreement countries.
As of early April, there were six new permits issued around U.S. LNG exports:
- The first new export authorization to non-FTA countries was announced on February 14 for the Commonwealth LNG project in Cameron Parish, Louisiana.
- Fourteen days later, the DOE removed barriers to using LNG as a marine fuel to power vessels (aka LNG bunkering). This order modified a December 2024 order by the Biden administration to JAX LNG, located in Jacksonville, Florida, which dispenses LNG as fuel to ships. The new order also removed the DOE as the enforcer of LNG bunkering.
- On March 5, the DOE extended the starting date to export 15 million tonnes per annum from ExxonMobil and QatarEnergy’s Golden Pass LNG. Golden Pass LNG is currently under construction in Sabine Pass, Texas.
- The DOE approved an LNG export permit extension for Delfin LNG in offshore Louisiana on March 10. Delfin hopes to reach final investment decision later in 2025 to start construction for its offshore LNG vessel. The order gave Delfin until June 1, 2029 to start exporting LNG to non-FTA countries.
- The DOE approved an LNG export authorization to Venture Global CP2 LNG project in Cameron Parish, Louisiana on March 19.
- On April 1, the DOE rescinded a Biden-era policy that required LNG exporters to meet stringent criteria to be considered for an extension of the commencement date for an approved LNG project. DOE authorizations for LNG to non-FTA countries usually require exporters to commence exports within seven years of authorization for the financing and construction of the related facilities. This new order intends to simplify the application process for extensions of the starting dates for LNG export to non-FTA countries.
Seeing the future of LNG in the United States as a significant growth opportunity, many private equity firms and global companies have quickly tried to join the swelling tides.
In February, during a joint news conference with Japanese Prime Minister Shigeru Ishiba, President Trump said that Japan will import American LNG “in record numbers,” and Japanese companies are in talks to join Alaska LNG. The Taiwanese announced plans to join the project roughly a month later, when CPC Corp. signed a preliminary agreement with Glenfarne Group to invest in the $44 billion Alaska LNG project. The agreement reportedly includes potential LNG offtake and equity investments in the project.
April saw an even greater interest. Chevron sold its east Texas gas assets for $525 million to TG Natural Resources, which is partially owned by Tokyo Gas. Australia’s Woodside Energy, which bought Tellurian for $1.2 billion in 2024, sold a 40-percent equity stake in its subsidiary to private equity firm Stonepeak for $5.7 billion. The subsidiary will construct Louisiana LNG before the project takes FID. Finally, Aramco and TotalEnergies finalized 20-year long term gas Sales and Purchase Agreements with NextDecade for a combined 2.7 million tonnes of per annum LNG to help NextDecade reach FID for Train 4 LNG in Texas.
As this trend develops, three key uncertainties remain. Firstly, how much Russian gas will return to the global gas market after the war ends? Second, will Europe and a post-Trump United States refocus on tackling greenhouse gas emissions? Third, how might new tariffs impact LNG trading globally?