LNG

US Federal Energy Regulatory Commission (FERC) has waived the mandatory pre-filing requirement for a third phase of Venture Global’s CP2 LNG expansion, signalling regulator’s openness to streamlining brownfield LNG build-outs. CP2 LNG Phase 3 is designed to boost peak liquefaction capacity from 28 mtpa to 35 mtpa.

The Philippine government is regulating electricity rates to counter the risk of LNG-linked price inflation of up to 16 percent, amid Middle East shipping disruptions. Energy Secretary Sharon Garin is negotiating stable coal supplies from Indonesia to facilitate fuel switching and wants to temporarily cap spot power prices.

Shell Australia adamantly opposes policies forcing LNG exporters to reserve more gas for the domestic market. Redistributing exiting supply is no solution, Shell Australia’s Cecile Wake says, so “let’s make the pie bigger.”

Orders for LNG-fuelled vessels reached 14.2 million gross tonnes in H1 2025 alone, more than 70% of the total alternative-fuelled tonnage ordered during the period, data from DNV’s Alternative Fuels Insight (AFI) platform shows. 

This surge reflects industry’s confidence in LNG as a scalable transitional fuel. DNV analysts see a “concerted push by shipowners to future-proof assets” amid tightening emissions regulations.

Container segment in the lead

A total of 87 LNG-fuelled vessels were ordered between January and June 2025. The container shipping sector is in the lead by a wide margin, with 81 of the 87 LNG-fuelled vessels, amounting to 13.6 million gross tons, destined for global liner operators. Leading container carriers are locking in LNG dual-fuel capabilities to meet forthcoming IMO and EU decarbonisation targets, including FuelEU Maritime and the IMO’s Carbon Intensity Indicator (CII) framework.

“LNG is clearly not a fringe option anymore—it’s a mainstream fuel choice, especially in container shipping,” commented Knut Ørbeck-Nilssen, CEO Maritime at DNV. “The rise in LNG orders signals that shipowners are prioritizing compliance, optionality, and access to fuel infrastructure. Even as the broader newbuild market cools, investments in LNG-fuelled vessels remain resilient.”

Uptick in LNG bunkering

LNG bunkering capacity also expanded notably: 13 LNG bunkering vessels were ordered in the first half of this year, equivalent to more than 20% of the current global fleet of 62 operational LNG bunkering ships. February alone saw eight LNG bunkering vessel orders, the strongest month on record for this segment. According to DNV, this underscores how port infrastructure and supply chain readiness are evolving in tandem with vessel demand.

Though zero-emission fuels like ammonia and hydrogen are still in early development, LNG offers immediate CO₂, NOₓ, SOₓ, and particulate matter reductions compared to conventional marine fuels. When combusted in advanced engines and supported by bio-LNG or synthetic LNG blends, emissions can be y reduced significantly. That way, shipowner can comply with upcoming lifecycle assessment (LCA) rules currently being finalized by the International Maritime Organization (IMO).

Regulatory inflection point

As the maritime sector approaches a critical regulatory inflection point in 2026–2030, the strong pipeline of LNG-fuelled newbuilds ordered in 2025 signals not just a trend, but a decisive strategic shift.

“What we’re seeing is a pragmatic approach to decarbonisation. LNG offers a combination of technical maturity, global availability, and regulatory headroom. For many shipowners, it’s the safest bet in the current landscape—especially as fuel intensity metrics and lifecycle-based emissions standards take shape,” Jason Stefanatos, Global Decarbonisation Director at DNV noted.

LNG bunkering hubs spring up and expand across Europe, Asia, and the Americas. The adoption of the cleaner-burning fuel is hence being matched by real-world infrastructure deployment – reinforcing LNG’s role as the industry’s bridge to low- and zero-carbon shipping.

The new US administration is pushing for deregulation and American energy dominance on global markets by fast-tracking permitting for LNG terminals and related infrastructure. Such policies are poised to boost oil and gas production and underpin US LNG export growth.

President-elect Donald Trump has already outlined a radical shift in US energy policies which is expected to spur investment in the upstream sector, as well as related pipelines to bring shale oil and gas from America’s major unconventional oil and gas basins to liquefaction terminals along the US Gulf Coast. Rising shale oil and gas production is bound to create a supply length and free up additional gas resources for liquefaction and export, as well as for the American downstream market, notably for the power gen and industrial sector, analysts at Rystad Energy reckon.

In his pro-energy agenda, Trump vowed to override and reverse Biden-era regulatory pauses on US LNG export projects and increase leases on federal land for fracking of unconventional oil and gas. If implemented, these policies could almost double US LNG export capacity from currently 11.3 billion cubic feet per day (Bcfd) in 2023 to 22.4 Bcfd in 2030 – especially if major projects like Texas LNG and Calcasieu Pass (CP2) move forward, analysts noted. CP2 attracted extra scrutiny from climate campaigners as the single largest LNG project proposed to date.

Such an expansion is deemed “crucial” for the United States to stay a major player in the global LNG market, where demand is forecast to reach nearly 600 million tons (Mt) in 2030. Based on currently producing and under-development projects, a supply gap of 140 Mt will materialize in 2035 – but considering the turn-around in US energy policy, Rystad Energy CEO Jarad Rystad is optimistic:

“We’re moving from a time of energy scarcity to a time of energy abundance,” he commented. Capacity additions in both fossil fuels and renewables will, in his view, outpace increases in demand in 2025.

Europe bargains for US LNG

Looking at the global supply picture, expanded US LNG production and exports could be used as a bargaining chip by the Trump administration in trade negotiations with Europe, Russia and other major economies in Asia.

“Europe is still searching for reliable, long-term alternatives to Russian piped gas and LNG supply, while China-US LNG trade is likely to be affected by tariffs,” said Rystad Energy’s head of North America Gas & LNG Research, Emily McClain.

European leaders have already hinted at using US LNG purchases as a bargaining tool to avoid potential trade tariffs under Trump’s administration. “By aligning energy policies and prioritizing US imports, Europe could secure a stable energy supply while fostering stronger transatlantic relations,” she suggested.

Trade tariffs 2.0 risk to push up energy prices

Trump has a legacy of levying trade tariff during his first administration which has been a great cause of concern about policy risks on the future cost of LNG and global trade. A 25% steel tariff, for instance – as implemented in 2018 –led to significant price increases for LNG projects. And this trend that could repeat under Trump 2.0.

Another trade war with China, meanwhile, could disrupt the flow of LNG between the two countries, just as it did in 2019 when LNG exports were halted. “Such tariffs would not only elevate capital expenses for LNG projects,” McClain warned, “[they would] also risk slowing contracting activity with key buyers like China, jeopardizing long-term export growth.”

On the other hand, there is a risk of oversupply on global LNG markets especially if multiple new US LNG projects move forward simultaneously. An oversaturated market could erode prices, disadvantaging US producers compared to competitors like Qatar and Australia, analysts noted. But reliable US supply would also unlock new demand, particularly from price-sensitive markets in Asia – if executed strategically.

India is poised to snap up big parts of the substantial volume of uncontracted LNG from the Middle East. Buying interest is on the rise as the Indian government allows utilities to blend LNG with domestically produced gas in a bid to make it more affordable for power generation, compared with coal.

Watch out for uncontracted LNG cargoes, seems to be the motto of Indian commodity traders and large utilities. Looking ahead, Rystad’s Kaushal Ramesh, Vice President Gas & LNG Research, expects savvy buyers to secure large parts of the uncontracted LNG production from Qatar, Oman and potentially Iran – at favourable terms.

“The nation is well-positioned to attract aggressive targeting from Middle Eastern producers and offtakers,” he said, noting nearly 100 million tons per annum (mtpa) of Middle East LNG will remain uncontracted by 2035.”

Flexible, low-cost supply preferred

Some potential pitfalls should, however, be taken into consideration: A key issue is Indian buyers’ history of renegotiating or even abandoning near-complete deals, which creates uncertainty for suppliers.

In Ramesh’s view, “this preference for flexibility and cost-effectiveness over long-term commitments highlights India's focus on securing the best prices for its consumers in a volatile global market – but it could limit LNG growth prospects.”

Delays at infrastructure build-out hampers the development of India’s overall gas and power gen sector. Regasification terminals remain concentrated in the western part of the country, and efforts to expand the gas pipeline network to other regions have been inconsistent.

“Slow progress is due to regulatory hurdles, challenges in securing investments, difficult terrain, and competing priorities,” he criticised, “as India channels significant resources into renewable energy development alongside its gas infrastructure.”

Domestic production can’t meet demand

Come 2040, India’s total gas consumption is forecast to double to almost 114 billion cubic metres (bcm) and despite a 51 percent jump in domestic production to 36.7 bcm by 2025, this will not suffice to meet India’s growing energy hunger. The Asian powerhouse and most populous nation will hence heavily rely on imports to meet its future energy needs.

Long-term contracts, extending way into the 2030s and beyond, help shield India from global price fluctuations and ensure a steady stream of cargoes shipped to Indian shores. Through these LNG offtake accords, India does not only strengthen its energy security but also facilitates a swift exit from more emission-intensive fuels like crude oil, mazut and thermal coal.

Coal still king in India, at least for now

India’s heavy reliance on coal has become apparent during the summer 2024 heatwaves, which temporarily propelled up coal-burn to meet peak power demand. Natural gas, on the other hand, currently accounts for just 2 percent of the country’s power mix – and in fact, coal-generated power is not projected to start falling this side of 2040.

Though gas-burn is unlikely to drive LNG imports, analysts at Oslo-based Rystad Energy believe “the sector could still see growth, however, depending on future policies to promote coal-to-gas switching or introduce carbon pricing.”

Bickering between US Vice President Kamila Harris and former President Donald Trump in the run-up to the US election is not hampering the steady growth of the shale gas industry and LNG majors. Focus on profitability and shareholder returns – rather than production growth – means the industry is unlikely to be influenced by promises of support or potential regulations from either candidate.