LNG prices are forecast to ease in 2025 – settling at $14-15 MMbtu – after recording new lows in 2024, according to Drewry Shipping Consultants’ research.
However the stabilising outlook comes amid warnings about tight supply, sporadic seasonal spikes, ongoing geopolitical uncertainty and disruptions. Rates will still be lower in 2025/26 but likely recover in 2027 and peaking in 2028.
LNG shipping rates plummeted 58% year-on-year in 2024 due to high vessel availability, limited new supply, subdued demand with ample gas storage in Europe, South Korea and Japan, and low industrial demand, as well as increased competition from renewables and nuclear.
Source: Drewry Shipping Consultants
Upside risks include incoming US supply, easing tensions in the Middle East and increased Russian piped gas to China, while downsides include the end of the Russia-Ukraine gas transit contract (11 million tonnes), sanctions on Russian LNG, the EU ending 2024-25 winter with lower storage, rising domestic gas demand in key exporting countries and other risks, such as weather-led disruptions, unplanned outages and project delays.
US LNG is set for accelerated growth following President Trump’s return to the White House, and projects that can secure FID in 2025 include Freeport LNG T4, Delfin LNG, Driftwood LNG, CP2 LNG and Corpus Christi Phase 3 Midscale. The US is expected to command over 320 mtpa of LNG liquefaction capacity by 2030.
Source: Drewry Shipping Consultants
Only 14 mtpa of planned capacity reached FID in 2024, however, including Ruwais LNG, Marsa LNG and Cedar LNG, and the US drew a blank owing to the Biden administration’s pause on LNG exports and permits.
In terms of global LNG demand last year, Asia was strong and South America ‘revived’ while Europe’s demand remained largely subdued among key importers such as France, UK, Spain and Italy, impacted by high inventory, higher renewable output, low gas consumption and robust pipeline supply, but will recover this year.
Source: Drewry Shipping Consultants
The LNG fleet is projected to expand by 10% in 2025 and 11% in 2026, growing at a CAGR of 9% to 2029.
