Liquefied natural gas (LNG) prices are expected to rise heading into 2025, as global demand is projected to surpass supply, according to an analysis by the U.S. Energy Information Administration (EIA). After a decline in production from 2023 to 2024, due to companies scaling back to cope with record-low prices, production is expected to increase in 2025. However, demand is predicted to significantly outpace supply, resulting in a price surge.
“The combination of growing LNG exports, increased demand for electricity generation, and the prospect of winter weather indicates a tighter supply-demand scenario for natural gas in 2025 and beyond,” said Thomas Jorden, CEO of Coterra Energy. The EIA also notes that rising LNG exports will push domestic gas prices up by 33% in 2025, after reaching a four-year low in 2024. Louisiana, a key hub for U.S. LNG exports, could see significant impacts, as the state produces and consumes vast amounts of natural gas.
While new LNG export facilities, such as the Venture Global Plaquemines project, are expected to help stabilize prices after they become operational, safety and environmental concerns surrounding these projects continue to spark controversy. The Biden administration paused new export permits earlier this year, citing climate change concerns, but the incoming Trump administration plans to lift the pause and issue new permits in 2025.
