LNG the strategic role of infrastructure

The global liquefied natural gas (LNG) market is entering its strongest growth phase to date, but this is unfolding amid unprecedented geopolitical tensions and major uncertainties about future regional demand for gas and LNG, as well as the role of lower-carbon alternatives. In this context, LNG infrastructure —both export plants and import terminals— plays a critical role in the market’s operations and flexibility. Infrastructure investments, policy decisions, and corporate strategies will shape how LNG infrastructure evolves in the decades ahead.

Current LNG export plants and LNG import terminals situation

In 2024, 406 million tons (Mt) of LNG were traded globally —about one in every eight molecules of natural gas consumed worldwide. Global LNG trade surpassed interregional pipeline trade in 2020. Since the decline of Russian pipeline gas to Europe in 2022, interregional pipeline volumes have fallen sharply and now sit well below the steadily rising levels of LNG trade.

Global liquefaction capacity reached 492 million tons per annum (mtpa) in 2024, with average utilization around 85 percent once idle plants are excluded. Twenty-two countries now export LNG, with the United States, Qatar, and Australia leading the pack. Three new export projects came online in 2024: two small floating LNG (FLNG) projects in Congo and Mexico, and the first train of Arctic LNG 2 in Russia. Although Arctic LNG 2 began operations in August, it shut down a few months later after failing to secure buyers for its sanctioned cargoes, which were operating via a dark fleet.

As of 2024, 49 countries import LNG across all regions, with total import capacity reaching 1,188 mtpa —more than twice global export capacity. This gap exists because LNG terminals are rarely used at full capacity year-round. Many countries build excess import infrastructure to ensure energy security, accommodate seasonal fluctuations, and provide supply flexibility. For instance, Middle Eastern countries typically import more LNG in the summer to meet air conditioning demand, and little to none in winter. Longtime importers like Japan and South Korea have maintained large import capacity to manage seasonal needs, given limited domestic storage and, in Japan’s case, its island geography.

The development of regasification capacity in Europe has been shaped by earlier optimistic demand forecasts, gas market liberalization, declining domestic production, and efforts to diversify supply. The rapid build-out since 2022 —largely through floating storage and regasification units (FSRUs)— was driven by the need to replace Russian pipeline gas and secure the continent’s energy supply. LNG import terminals serve a different function from pipelines in this context. While pipelines typically operate near capacity, regasification terminals offer flexibility, allowing countries to respond to supply disruptions or demand surges. Unlike pipelines, which tie buyers to specific suppliers, LNG terminals enable access to a range of sources, market arbitrage, and more dynamic responses to shocks.

Looking forward

Looking ahead, a wave of liquefaction projects —led by the United States and Qatar— is set to add well over 200 mtpa of LNG export capacity, reinforcing LNG’s central role in the global gas market. The United States, already the world’s largest LNG exporter, aims to more than double its export capacity by the end of the decade. This expansion is underway, with projects such as Venture Global’s Plaquemines and Cheniere’s Corpus Christi Stage 3. By 2030, the U.S. is expected to account for more than quarter of global LNG export capacity, effectively dominating the market.

This dominance faces challenges. Qatar is also expanding its LNG export capacity, supported by low-cost gas and a strategic location that allows it to arbitrage between Asian and European markets. Still, based on officially sanctioned projects, U.S. LNG export capacity will be about 40 percent greater than Qatar’s. Australia remains a major exporter but is expected to begin importing LNG soon due to regional supply shortfalls.

Finally, Russian pipeline gas and LNG remain key competitors to U.S. LNG. Since 2022, reduced Russian pipeline flows to Europe have been partly offset by U.S. LNG, supporting new liquefaction projects. Whether the European Commission’s goal to phase out Russian gas by 2027 will succeed remains uncertain, especially amid ongoing peace discussions related to Ukraine. Oil and gas will be part of any eventual settlement. A further decline in Russian pipeline deliveries to Eastern Europe —currently around 15 billion cubic meters— would create more room for U.S. LNG. But a return of Russian gas to Europe, which has been widely discussed, would undermine U.S. LNG prospects and reduce utilization of Europe’s regasification capacity.

On the demand side, countries such as Australia, Cyprus, and South Africa may begin importing LNG in the coming year. Still, despite the recent rise in European LNG imports, Asia remains the center of gravity for global LNG consumption. Two-thirds of the regasification capacity added in 2024 (35 mtpa) was located in Asia. Future demand growth is expected to come from China, India, and Southeast Asian countries, though the drivers differ —rising electricity demand, LNG replacing declining domestic production, or substituting for pipeline imports. India and Southeast Asia face three main challenges: making LNG cost-competitive with coal, expanding regasification capacity, and building downstream pipeline networks. The latter two face financing hurdles, while affordability is critical to avoid a leap directly from coal to renewables.

Some countries both export and import LNG. Egypt, for example, began importing LNG in 2015 due to domestic gas shortfalls. Although it returned to net exporter status from 2019 to 2023, declining gas production has led it to resume imports in 2024. FSRUs have been key in enabling these shifts. Similarly, countries like Indonesia and Malaysia —longtime LNG exporters— are increasingly turning to imports to meet growing domestic demand.

In Europe, LNG infrastructure owners are beginning to move beyond traditional regasification, exploring investments in multi-molecule terminals —facilities designed to handle not only LNG but also greener alternatives such as hydrogen, ammonia, bio-LNG, and synthetic methane. This shift aligns with the EU’s broader decarbonization goals and reflects a push toward future-proof infrastructure. However, concerns remain about the long-term viability of some terminals, especially if industrial activity shifts to regions with cheaper energy amid the ongoing trade war. Uncertainty also persists over which greener molecules will ultimately dominate.

Over the past two years, two chokepoints have emerged that significantly disrupted LNG shipping routes. Houthi attacks in the Red Sea and low water levels in the Panama Canal have forced LNG cargoes —particularly from the U.S. and Qatar— to take longer alternative routes. At the same time, geopolitical and commercial developments are making LNG trade less flexible, more polarized, and potentially less efficient. The U.S.-China trade war disrupted U.S. LNG exports to China, with Chinese-contracted cargoes diverted to Europe. Even if flows resume, this second major disruption between the world’s largest LNG exporter and importer will have lasting effects. Europe, meanwhile, plans to end imports of spot Russian LNG by end-2025 and all Russian LNG by end-2027. Its upcoming methane regulation could further segment the market by distinguishing between “clean” and “dirty” LNG supplies.
 

An evolving role

The LNG sector stands at a critical juncture. Existing infrastructure reflects both past priorities and future ambitions—import capacity is often intentionally oversized to ensure security and flexibility yet may face declining regional use in the coming decades. Looking ahead, the market will be shaped by a few dominant exporters and complex geopolitical dynamics, with demand increasingly centered in developing Asia. As the world navigates climate goals, growing power needs, and shifting trade patterns, LNG will continue to play a pivotal —though evolving— role.