Sinolink: The global natural gas market has entered a new stage driven by LNG, and the price center will shift downwards.

Sinolink released a research report stating that the global natural gas market will experience a complete cycle from 2020 to 2024, with a structural tight balance in 2025. Starting from 2026, the world will enter a "super expansion period" for LNG, with a reshaping of the supply side towards a "US-Qatar dual core" model and moderate growth and regional differentiation on the demand side. The market will shift from a tight balance to a loose one, leading to a downward trend in gas prices in Europe and Asia. Meanwhile, the US market will see an upward cycle in prices due to strong exports and power demand. Sinolink's main points are as follows: Review and Current Situation: Cycle and tight balance pattern From 2020 to 2024, the global natural gas industry went through a complete cycle of "demand collapse and low prices - supply shock and price increase - loose supply and price decline." The spot price of the Dutch TTF experienced extreme fluctuations before falling back, resulting in structural reshaping of global trade patterns. The EU's LNG import share first increased and then decreased, the US became the largest LNG exporter globally, China returned as the largest importer, and the industry accelerated from "regional markets" to a "globally integrated, LNG dominated" pattern. In 2025, the global natural gas market will show a "slow growth, high price, structural tight balance" trend, with demand growth slowing to 0.9% and supply relying on new projects in North America. Despite disruptions in the Russian gas pipeline, the supply side remains tight, with Europe replenishing high-priced inventories and steady demand growth in Asia. Chinese natural gas demand may slow temporarily, but is expected to return to a high-growth path. Outlook: Supply-demand restructuring in the "super expansion period" of LNG, and downward trend in gas prices in Europe and Asia Supply side: 2026 is expected to be a key turning point for the global LNG "super expansion period." From 2026 to 2030, approximately 202 million tons of LNG capacity is expected to be added, a 40% increase compared to 2025, with an average annual growth rate of about 6.8%. Capacity expansion will be highly concentrated in North America and the Middle East, reshaping the supply landscape from a "multi-polar, dispersed" model to a "US-Qatar dual core" model. Meanwhile, the "westward retreat and eastward advance" of Russian pipeline gas and the EU's gradually banning of Russian gas arrangements will continue to decrease the global share of pipeline gas, further elevating the pricing power of LNG in global marginal supply. The dominance of US and Qatar LNG in pricing will increase significantly by 2030, with Australia's share declining. This shift will lead to concentrated bargaining power, longer trade routes, marginalization of high-cost projects, and further acceleration of LNG project development. The number of LNG projects reaching FID from January to October 2025 has significantly increased. Demand side: From 2025 to 2030, the global natural gas demand is expected to grow at a compound annual growth rate of about 1.56%, showing a moderate expansion trend. Regional differentiation is evident, with the Asia-Pacific region experiencing the fastest demand growth. China is the core growth engine, while the Middle East and Africa show steady demand growth. European demand is contracting, driven by renewable energy substitution and decarbonization policies, while North America's demand growth is below 1%, mainly supported by the power sector. The global LNG market is expected to gradually shift from a tight balance starting in 2025 to a loose balance by 2026, entering a slightly loose phase in 2027, and transitioning to oversupply in 2029. Supply-driven loosening will shift the global gas price system from "supply constraints" to "cost constraints + demand elasticity," with prices anchored on the marginal supply cost of US and Qatar gas. The benchmark prices of European TTF and Asian JKM will gradually align with the prices of US-sourced gas, leading to a gradual downward trend in the medium to long term. US gas prices: Upward cycle in prices driven by LNG exports and power demand The US natural gas market is in a situation of "limited supply elasticity and continuous demand expansion," with LNG exports and data center-driven electricity demand as core growth engines. This is expected to lead to a shortage from a tight balance, with the Henry Hub price center likely to rise significantly in 2027, starting a new cycle of price increases. The full-cycle cost structure of Xinjiang Xintai Natural Gas wells in the US is concentrated in the range of $3-3.5/MMBtu, providing support for a long-term floor price for Henry Hub. US upstream production leader EQT, LNG export leader Cheniere Energy, and midstream leaders Energy Transfer and Kinder Morgan may continue to benefit from the prosperity cycle of US LNG exports. Risk warning: Geopolitical conflict risks; unexpected changes in supply and demand; policy adjustment risks.