Global Gas Tightness Eases as LNG Growth Surges, Pipeline Flows Decline

The IEA says the next LNG wave is reshaping global gas markets, easing tight pipeline supply and helping Europe balance declines from Russia and Norway. Demand remains weak in Asia, but is expected to rebound by 2026.

(P&GJ) — Global gas markets are shifting into a new phase as a historic increase in liquefied natural gas (LNG) supply begins to ease several years of tight pipeline fundamentals, according to the International Energy Agency’s Gas 2025 report.

The agency says nearly 300 Bcm per year of new LNG export capacity will come online by 2030, largely from the United States and Qatar, helping offset persistent declines in long-distance pipeline gas trade. 

“The coming wave of liquefied natural gas (LNG) production capacity is expected to profoundly transform market dynamics, enhancing supply security and improving affordability,” the IEA said.

Demand Stagnates as High Prices Curb Growth

After a strong rebound in 2024, global gas demand slowed sharply in early 2025, rising just 0.5% in major consuming markets through the first nine months of the year. The IEA attributes the slowdown to high spot prices, weak industrial activity and softer Asian consumption. Demand was strongest in Europe and North America, while Asia remained flat and Eurasia posted declines.

For 2025, global demand is expected to grow less than 1%, before accelerating to 2% in 2026 as new LNG supply improves availability.

Pipeline Gas Declines Continue — Especially Into Europe

Pipeline trade continues to deteriorate as Russia reduces flows and several producing regions face supply constraints. Between 2024 and 2030, long-distance pipeline deliveries are expected to fall by almost 55 Bcm, the report notes.

Europe remains the most exposed region. In Q1–Q3 2025:

• Russian piped deliveries to the EU fell 45%, or 10 Bcm.
• Norway’s flows declined 2.8%, driven by outages and maintenance.
• The EU compensated by boosting LNG imports 28%, reaching a record 127 Bcm over the same period.

The surge in LNG kept Europe’s supply stable even as pipeline availability tightened. U.S. LNG alone accounted for nearly all incremental supply, with deliveries to Europe up 60% year-over-year.

U.S. LNG Drives New Supply While Legacy Producers Falter

Global LNG trade grew nearly 5% in the first three quarters of 2025, supported by U.S. expansions such as Plaquemines LNG, Corpus Christi Stage 3 and higher output from Freeport LNG following two years of reduced operation.

However, several legacy producers saw declines:

• Russia: –11%, with multiple sanctioned plants offline
• Norway: –44%, due to delayed restarts
• Algeria: –22%
• Australia: –3%, driven by North West Shelf declines

Despite this, global LNG growth is expected to exceed 5% in 2025 and reach 7% in 2026 as new Gulf Coast and Qatari trains enter the market.

Price Trends Diverge Between Regions

Spot natural gas prices eased in Q3 2025 for both Asia and Europe, falling below 2024 levels:

• TTF: $11.3/MMBtu, down 4% from Q2
• JKM: $11.7/MMBtu, down 4%
• U.S. Henry Hub: $3/MMBtu, still 40% above 2024 due to tighter domestic balances

Volatility declined on European hubs as improved LNG supply helped stabilize short-term pricing.

Storage Conditions Improve Ahead of Winter

European underground gas storage rebounded through summer 2025 with above-average injections, although inventories are expected to sit below the EU’s 90% target entering winter.

• EU storage ended winter 2024/25 at a 26 Bcm deficit versus the previous year.
• By October, that deficit shrank to 13 Bcm.
• The U.S. ended September 1% above its 2024 inventory levels after strong injection activity.

Japan and Korea saw more mixed LNG storage patterns, with Korean inventories lagging year-ago levels due to strong summer power demand.

Post-2030 Tightening if Investment Slows

While the immediate future appears well-supplied thanks to the LNG boom, the agency cautions that an extended period of lower LNG prices “could reduce the incentive for project developers to invest” in future liquefaction, upstream feedgas and midstream capacity. This could create new tightness after 2030 if demand outperforms expectations.

This article is based on the International Energy Agency’s Gas 2025 report.