The copious quantities of natural gas liquefaction for commission in global markets could result in a medium-term liquefied natural gas (LNG) oversupply problem.
According to the Gas Exporting Countries Forum’s (GECF) annual natural gas report for 2024, 15 million tons of natural gas liquefaction capacity are due for commissioning this year, mainly in Russia, the US, Senegal, Mexico and the Congo.
However, the amount of natural gas liquefaction to be put into service in international markets could rise by 53 million tons annually by 2025.
A total of five LNG export projects—Altamira, Arctic LNG, Congo, and GTA—are poised to come online this year. These developments come following a rebound in final investment decisions for new liquefaction agreed upon last year. From 32 million tons in 2022 to the current 41 million tons, liquefaction capacity has increased.
Despite the sharp decline in spot gas and LNG prices last year, many lucrative long-term LNG contracts supported the recovery in final investment decisions.
Three-quarters of final investment decisions on LNG export projects were made in the US during this time, with Gabon receiving approval for the lone non-US project with a capacity of 700,000 tons.
According to the GECF, a total of 410 million tons of LNG were exported last year, with the US exporting the majority at 88 million tons.
Qatar and Australia followed a close second with 79 million tons each, and Russia ranked third with 31 million tons.
Only 83% of the 490 million tons of worldwide natural gas liquefaction capacity have been used as of the end of 2023; this rate, combined with the addition of new capacity, is expected to produce a supply surplus.
In the short term, final investment decisions are anticipated for LNG export terminal projects totaling over 230 million tons in 2024 and 2025.
The US accounts for about 50% of this capacity, followed by Russia with 11%, Mexico and Mozambique with 8% each, Qatar with 7%, and Tanzania and the United Arab Emirates with 4% each.
