APAC gas and LNG contracting to stay high in 2025
Trump tariffs could prompt Chinese gas buyers to look for other sellers
Middle Eastern sellers will offer strong competition with the US, where new tariffs on China could mean unintended consequences, energy consultancy Wood Mackenzie says
ASIA-PACIFIC gas and LNG contracting will stay high in 2025 driven by US and Chinese policies and emerging LNG importers, according to energy consultancy Wood Mackenzie.
The region’s LNG demand grew by 19m tonnes, or 7% year on year in 2024, driven by growing economies, structural production declines, new buyers in the market and delayed nuclear power plants.
WoodMac predicted the potential rise in US tariffs, China’s stimulus package and coal policy, higher global coal prices and potential hotter La Nina weather would complicate regional markets.
President-elect Trump following through with 60%-100% tariffs on Chinese goods would, if enacted, “undoubtedly ignite a tariff retaliation from the Chinese government” and this would likely include LNG.
Last year roughly 4m tonnes of US LNG was unloaded in China, and Chinese companies have close to 8m tonnes of US contracted volumes this year, excluding volumes contracted with portfolio players.
They could trade or swap those volumes in retaliation for tariffs, or look to non-US sources for future contracts in response, WoodMac said.
With the US soon to lift its export pause, WoodMac expected Japanese and South Korean buyers to sign long-term sale and purchase deals with US projects that have not yet received final investment decisions, to move the projects forward.
“We also expect buyers in South and Southeast Asian countries to seize this opportunity to bargain for favourable terms,” WoodMac said.
Indian buyers contracted 11m tonnes per annum in 2024, helped by lower prices, while Thailand led contracting in Southeast Asia. “We predict buyers from both countries will remain active in the contracting market to reduce their exposures to the volatile spot market.”
Middle Eastern LNG, particularly from Qatar, would compete strongly with the US; expansion of Qatar’s North Field project could tempt Asian buyers with more diverse supplies and more flexible contract terms.
APAC prices could fall in the short term if Trump manages to end the Russia-Ukraine war and lifts sanctions on Russian LNG, though sanctions could also escalate in his second term.
China’s recent stimulus and relaxed monetary policy would lift its 2025 GDP and gas consumption, but sustained recoveries of industrial output and consumer confidence were needed for this to continue.
WoodMac expected China’s pledge to start cutting coal consumption in the next five years would also benefit gas demand, if it meant cleaner energy policies included in the country’s next five-year plan.
Australia and New Zealand are also emerging as potential new LNG importers for their winter peak demand due to declining domestic production. Cambodia could join them, with its first gas-fired power plant coming online in 2027.
Indonesia, one of the region’s largest gas producers, will continue to ramp up production under its new president, Prabowo Subianto.