Gastech 2025: when will the music stop for US LNG?

Gastech 2025 revealed a clear consensus that gas is essential to ensuring stability in increasingly connected energy markets. The industry’s response is a seemingly unbridled investment push across the LNG value chain globally to ramp up supply and feed the predicted growth in demand over the next decade.

But the industry risks over-exuberance, particularly as the LNG ecosystem expands. Our team, just back from Gastech 2025 in Milan, shares its concerns that some cracks may be starting to show.

For US LNG developers, when will the music stop?

The US LNG bandwagon rolled into Milan exuding confidence, boosted by announcements both of new long-term contracts and yet more project final investment decisions. Chris Wright, the US Energy Secretary, and Doug Burgum, Secretary of the Interior, were in town to beat the drum of US energy dominance, putting LNG at the fore. Estimates of the volume of US LNG to be sanctioned this year alone have already headed higher, with more to come over the next 12 to 18 months. But the US LNG export party can’t go on forever, and the sheer volume of capacity up for sanction is starting to raise serious questions. Each project taking FID will make commercial sense in its own right, but collectively risk edging the market closer to oversupply.

Is the world’s biggest LNG market now its biggest headache?

Anticipated lower spot prices have long been expected to boost demand in Asia. Over the past two decades, China has risen to be the world’s largest LNG importer and remains the big hope to absorb much of the new LNG supply coming to market.

But worries over Chinese LNG demand are now audible. Overall energy demand in China has been weaker than expected this year, with LNG imports down 18% for the first eight months of 2025 compared to the same period last year. Looking further forward, China’s plan to construct the huge 60-GW Medog hydro project, progress towards additional Russian pipeline gas imports and its ongoing massive rollout of wind and solar capacity all pose structural risks to longer-term LNG demand growth.

Geopolitics front and centre for the LNG industry. Geopolitics and gas/LNG are increasingly interconnected. The Trump administration’s push for energy dominance is the sharp end.

As US dissatisfaction with Russia grows, we see a more determined effort by the White House to accelerate the complete shut-out of Russian gas and LNG into Europe, an outcome welcomed by European Commission President Ursula von der Leyen earlier this week. That creates more opportunity for US LNG in Europe, of course. For an administration committed to lowering prices for US consumers, targeting Russian gas and LNG exports to Europe – rather than Russian crude, which could spike oil prices – looks the more palatable option.

But geopolitics isn’t the sole domain of the US. Russia’s high-profile riposte has been twofold so far – the recent delivery of two Russian Arctic LNG-2 cargoes into China and Russia’s announcement of a binding Power of Siberia 2 ‘deal’ earlier this month. Whether US LNG or Russian pipeline gas, raised geopolitical uncertainty does little to alleviate existing concerns over supply concentration.

Identifying the winners and losers.

The numerous new entrants into LNG are creating a bigger, more diverse and more liquid market. Rapid change and increasing volatility will inevitably lead to winners and losers. US LNG offtakers could feel the pain of a future margin squeeze. At the same time, most US LNG project developers are relatively insulated, given the infrastructure-style commercial framework of US LNG liquefaction projects and fees. European consumers could be the biggest winners as prices soften after weathering the loss of further Russian imports, while Asian buyers with firm demand benefit from locking in long-term contracts at lower prices.

The huge pool of financing from both debt and equity markets also underpins confidence in the US gas and LNG story. With renewables constrained by the OBBBA and the Trump administration overtly pro-gas, debt and equity capital is lining up to support new projects. What surprised us at Gastech, however, were the first hints of scrutiny around financing new supply – debt finance looks relatively secure, but equity investors are increasingly attuned to the potential for margins to be squeezed by higher US gas prices and lower international spot prices.

Could the LNG industry benefit from a reality check?

Our numerous conversations in Milan around the emerging downside risks suggest it’s required as concerns of oversupply grow. This isn’t about bursting the LNG bubble – far from it. Rather, it’s aimed at keeping the industry match-fit to deliver the next phase of growth in an increasingly interconnected world.

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