Lower gas prices are on the horizon after a surge of approvals for new liquefied natural gas projects this year compounded forecasts of a looming global supply glut, according to the International Energy Agency.
By 2030 global supplies of LNG are expected to increase by 50 per cent, adding an “unprecedented” 300 billion cubic metres of annual supply capacity, the agency said in its annual World Energy Outlook.
Based on existing and planned energy policies globally, this would result in annual supplies outstripping demand by some 65 billion cubic metres, the IEA estimates.
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LNG is gas superchilled to minus 162C to turn it into a liquid form for transport by tanker. Demand soared as Europe sought to wean itself off pipeline gas from Russia after its invasion of Ukraine, leading to a spike in global gas prices.
Although prices have fallen back significantly they remain above typical pre-crisis levels, contributing to higher energy bills. Lower gas prices could bring welcome relief for energy consumers but could also pose political challenges for efforts to tackle climate change, by making some low-carbon energy sources look comparatively more expensive.
The Paris-based IEA was founded in 1974 as a forum for energy co-operation.
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“Final investment decisions for new LNG projects have surged in 2025, adding to the expected wave in natural gas supply in coming years and promising lower international prices,” the IEA said in its report.
About half of the forecast new supplies were being built in the United States and about a fifth in Qatar, followed by Canada and others, it said.
About a quarter of UK gas imports came in the form of LNG last year, with the US the biggest source.
The IEA said it had revised up its estimates of global natural gas demand in its “stated policies” scenario in this year’s publication, but that “questions still linger about where all the new LNG will go”.
“Europe and China, the main destination for new LNG supply over the past decade, are set to take some of the new volumes, but the upside potential is limited in [this scenario] by continued momentum behind the deployment of renewables, nuclear energy in some countries, and efficiency policies,” it said.
“As a result, lower-priced LNG flows to other parts of the world where affordability is a key consideration, notably India and other parts of south and southeast Asia. The response in these price-sensitive markets is significant but not enough to use all of the available LNG supply in [this] scenario.”
In an alternative scenario where only existing policies are implemented and countries do not press ahead with stated policy intentions, “a slower pace of transitions sees more LNG going to China and Europe, fully absorbing the coming wave of LNG supply and keeping prices higher”.
Elsewhere in the report, the IEA warned of the “urgent need to enhance the resilience and diversity of critical mineral supply chains” with China increasingly dominant in its control of crucial supplies.
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“A single country is the dominant refiner for 19 out of 20 energy-related strategic minerals, with an average market share of around 70 per cent. The minerals in question are vital for power grids, batteries and electric vehicles, but they also play a crucial role in AI chips, jet engines, defence systems and other strategic industries,” it said.
“Geographic concentration in refining has increased for nearly all key energy minerals since 2020, and particularly for nickel and cobalt.”