-- TPH Energy forecast global LNG oversupply peaking at 108 million metric tons per annum, or about 14 billion cubic feet per day, in 2032, it said in a Friday note.
The firm expects the global LNG market to enter a prolonged oversupply cycle beginning in 2027, although supply conditions should remain tight through 2026.
TPH said higher prices will likely reduce consumption in price-sensitive markets such as China, where utilities and industrial users can switch toward alternative fuels, domestic gas supplies, and pipeline imports.
The global LNG market should return to balance by 2039 as resource scarcity slows future supply additions across major producing regions.
TPH's outlook assumes US producers will initially shut in about 4.5 Bcf/d of gas output, while curtailed volumes could expand to nearly 8 Bcf/d by 2040.
Annual global LNG supply may climb by 193 million metric tons per annum between 2025 and 2040, with capacity projected to peak around 702 MTPA in 2032, according to the note.
Most future LNG supply growth could come from the US with 76 MTPA of additional capacity, while Qatar may add 58 MTPA and Canada another 30 MTPA, partly offsetting output declines in Australia, Malaysia, and Indonesia.
Driven mainly by China, India, and other developing Asian markets, global LNG demand could expand by 217 MTPA between 2025 and 2040 and reach roughly 652 MTPA by the end of the forecast period, TPH said.
China may represent 66 MTPA of additional LNG demand growth through 2040, while India could contribute another 50 MTPA over the same period, according to the report.
High European gas inventories and prolonged oversupply conditions could pressure much of the market to levels below $6.50/MMbtu in the second half of 2028, while TPH lowered its broader long-term international gas price outlook to a range of $6/MMbtu to $8.50/MMbtu.