LNG

Greater utilisation of India’s fleet of gas-fired power plants could accelerate LNG imports to bridge the gap left by marginal domestic gas production increases, the International Energy Agency (IEA) finds. Supportive policies by the Indian government could tilt the national power gen mix more towards cleaner-burning natural gas and hydrogen in the coming years.

Trump trade policies could deeply impact global gas markets: “His opening salvo in a US-China trade war has been fired, with 10% tariffs on Chinese goods and retaliatory 15% tariffs on US LNG, while his stance on Russia remains unclear," Rystad Energy commented. Closer to home, Trump's 10% tariff on Canadian gas drives up prices, squeezes profit margins of smaller producers and could potentially lead to production cuts and delayed investments.

Plans to realise an onsite LNG regas terminal adjacent to an oil refinery on Java island are being reconsidered. Called Central Java Mini LNG terminal, the 0.84 mtpa regas project comes at an estimated cost of $152 million and would supply gas to a local refinery as well as to electric utilities in southern central Java.

LNG demand in Japan’s power sector is expected to rise by more than 10% to about 74 million tons by 2040, the government forecasts factoring in a slow build-out of renewables. Unless wind and solar power capacity expands substantially, or the cost of hydrogen and ammonia falls sharply – Japan’s gas demand is bound to increase.

The TTF needs to price higher at around €57/MWh for the balance of 2025– if European buyers want to succeed in attracting flexible LNG cargoes, as inventories are depleting fast. Reduced Norwegian pipeline gas flows could propel up TTF prices, analysts warn, as Europe lost its ability to further minimise power-sector gas demand.

China’s rapid adoption and scale-up of LNG trucks sales is displacing the use of oil and oil products in road transport, lowering diesel demand. Based on the current order book and stringent environmental regulations, the International Energy Agency (IEA) expects the number of LNG-fuelled ships to almost double and reach over 1200 vessels by 2028.

The latest National Development and Reform Commission (NDRC) measures for gas utilisation  from June 2024 categorises heavy-duty vehicles transport as a priority sector for LNG as a fuel, and related policies put forward the promotion of natural gas in transport uses.

“The sale of LNG-powered trucks consequently accelerated in 2023 and 2024 – just as LNG prices eased to competitive levels with diesel. However, as LNG prices again rose above the switching point with diesel during H2 2024, new LNG truck registrations tumbled immediately,” analysts pointed out.

Infrastucture constraints are further stumbling blocks to shift much of China’s road transport onto LNG -fuelled trucks. Local authorities’ decisions on building out LNG refuelling infrastructure hinge on economic considerations around the availability of affordably priced gas. “Given the volatility of LNG diesel price competitiveness,” analysts noted that “continued growth in gas-fuelled transport would require stronger policy support.”

Domestic coal, solar PV outcompete LNG

In the power gen sector, meanwhile, the displacement of oil and oil products is set to continue over the medium term. But even though Chinese utilities convert some of their ageing coal-fired power stations to run on natural gas – it is solar power which outcompetes new gas generation on cost.

Looking China’s overseas investment, renewables for the first time overtook fossil fuel projects in terms of new capacity installed. Overseas power projects, completed under China’s Belt & Road initiative, reached a record 24 GW in 2024 – double the capacity installed in the previous year. Solar PV accounted for 8 GW of these projects while though 48% of completed projects were legacy coal-fired and gas- or oil-fired plants, with 6 GW each.

Falling technology costs for green energy and renewables drive this trend, with much of the change owed to very cost-competitive China-made solar panels. “Chinese companies are leading its deployment in many developing markets that could not previously afford

Still, coal power is still dominating the Chinese power market: A staggering 19 GW of coal power projects remain in the pipeline, although they are subject to potential cancellations due to the global shift away from coal and the government’s 2021-policy announcement of ‘No new overseas coal power’. In addition, 9 GW of gas projects are currently under construction or in the planning stages.

Michael Lewis, CEO of Germany’s largest gas importer Uniper, welcomes plans by U.S. President Trump to expand oil & gas production as well as LNG exports. He urged German industry to use more ‘blue hydrogen,’ made via steam methane reforming, into their energy transitions plans, rather than focussing solely on ‘green hydrogen,' derived from renewable energy.

Scepticism abounds as to whether US LNG exports projects will gain traction following President Trump’s executive order to resume approvals for LNG exports to non-FTA countries. Analysts see this move as a “reshuffling” of which pre-FID projects are most likely to be sanctioned – not as an actual change to the number of FIDs.

“US LNG projects compete in a global market, and each additional FID draws on additional, higher-cost supplies, eroding their economic competitiveness,” commented Rystad Energy’s senior vice president, Oil & Gas Research, Amber McCullagh.

To-date, American LNG projects largely rely on feedgas from the Haynesville shale, where the remaining Tier 1 inventory is limited and ownership of acreage is increasingly consolidated among the largest operators. Appalachia shale, in contrast, is home to the most untapped gas reserves – but moving these molecules to the coast for liquefaction and export is deemed “prohibitively expensive.”

“Trump is likely to push for permitting reforms, but such changes would require an act of Congress, which saw some bipartisan interest in the last session,” she noted, indicating the actual revision or withdrawal of former President Biden’s pause on approving non-FTA export licenses will be limited. Biden’s action halted momentum on several projects that had previously been close to taking final investment decision which sparked fierce criticism from the industry.

Outlook of gas-fired generation uncertain

Regardless of Trump’s rush to declare a ‘National Energy Emergency’ on his first day in office, analysts caution the President’s “drill, baby, drill” mantra overestimates the industry’s willingness to prioritize growth over investor returns in light of Tier 1 inventory depletion in core oil basins after 2030.

Speeding up permitting on federal land may incentivise some operators to produce more oil and gas, though volume growth is expected to be marginal and mostly used as feedgas for LNG export projects. Gas-fired power generation, on the other hand, may not benefit much as domestic gas prices are unlikely to recede sufficiently to make burning gas more competitive than unabated coal in some areas, let alone renewables.

“Trump signalled he would block new offshore wind leases, but these are unlikely to meaningfully impact the US generation mix,” McCullgah commented, adding: “Removing subsidies for wind and solar generation would have a more significant impact, but such a move would also require Congressional approval, and Republicans’ margins are very small in the House of Representatives.”

Nontheless, momentum in gas-fired generation is already in place, so rising domestic fossil fuel demand is likely – especially since utilities struggle to meet rising electricity demand from data centers and e-vehicles, and are hard pressed to provide sufficient dispatchable generation for balancing power.

Though the Department of Energy (DOE) reckons the Philippines two new LNG terminals will have “no problem in securing supply” once opened in March and April, analysts revised down the country’s LNG imports. High global gas prices are pressuring utilities to use less LNG for power generation, as higher renewables and coal generation suffices to meet demand.

LNG demand growth east of Suez is expected to exceed regionals supply, so Asian buyers are looking to pull some flexible Atlantic cargoes to balance. Energy Aspects is bullish against JKM-TTF spreads over the balance of 2025, though call on cross-basin is lower this year as contractual term cover in the top five Asian markets – China, Japan, South Korea, Taiwan and India – has fallen to 82% in 2025.