LNG Outlook 2025: Strategic Insights from Wood Mackenzie’s Daniel Toleman

At the 3rd Australia-China LNG Forum, Daniel Toleman, Research Director for Global LNG at Wood Mackenzie, delivered a compelling keynote on the shifting dynamics of the global LNG market. His presentation provided clarity on supply-demand trends, geopolitical influences, contracting activity, and the long-term role of LNG in the global energy transition.

Key Takeaways: A Market in Flux, but Still Growing

1. China’s Central Role in Future LNG Balancing

Historically, Europe has played the role of the global LNG market balancer. However, Toleman predicted that China is set to assume that position from the middle of this decade onward. With its capability to toggle between piped gas and LNG imports, China will increasingly influence global trade flows and price stability.

2. Resilience Through Crisis, Opportunities Through Transition

From pandemic lows in 2020 ($2/MMBtu) to the 2022 energy crisis ($100/MMBtu), the LNG market has endured extreme volatility. Despite uncertainties such as geopolitical tensions in Ukraine and the Middle East and delays in project startups, the mid- to long-term outlook remains bullish.

Wood Mackenzie forecasts global LNG demand to reach nearly 700 million tonnes by 2050, with Southeast Asia, South Asia, and China as key demand drivers.

3. The Emissions Debate: LNG vs Coal

Addressing concerns about methane leakage, particularly from U.S. LNG, Toleman emphasized that LNG remains significantly cleaner than coal—even when using the more aggressive 20-year Global Warming Potential (GWP-20) metric. Australian LNG, in particular, demonstrates relatively low emissions intensity compared to other regions.

This reinforces LNG’s continued relevance in a “delayed transition” scenario, where clean alternatives are still scaling.

4. Contracting Trends: Asia Leads, Price Volatility Shapes Strategy

Asia—especially China and India—has dominated LNG contracting in recent years. Between 2021 and 2023, Chinese buyers secured over 60 million tonnes per annum (mtpa) of long-term supply. Indian buyers followed with 11 mtpa in 2024, capitalizing on favorable Brent-linked pricing in the 12.2–12.8% range.

Most new contracts are oil-indexed, as buyers seek to avoid exposure to the extreme spot market volatility witnessed in recent years.

5. Australia’s Strategic Role: Maintain, Not Expand

According to Toleman, Australia’s LNG supply is not expected to grow significantly in the coming decades. Instead, the focus will be on keeping existing plants full through backfill projects, maintaining exports at around 60 mtpa through 2050. This will continue to deliver substantial national revenue without major new developments.

6. New Supply: Middle East and North America Take the Lead

While Southeast Asia shows limited project momentum, countries like Qatar and the U.S. are poised to dominate future supply growth. With Trump’s election win expected to lift regulatory pauses in the U.S., multiple new FIDs (Final Investment Decisions) are anticipated from 2025 onward, especially from the Gulf Coast.

Projects like Qatar’s North Field West and U.S. ventures such as Sabine Pass Phase 5 and Commonwealth LNG are likely to anchor the next supply wave entering the market around 2029–2031.

7. Market Dynamics: A Soft Landing, Not a Glut

While concerns linger about potential oversupply, Toleman argued that robust demand growth and delayed project timelines suggest a more balanced market than feared. Prices are expected to hover between $8–$10/MMBtu in the medium term, with no major collapse anticipated.

Final Words: LNG’s Enduring Relevance

Daniel Toleman concluded with a powerful reminder: LNG emits less than half the CO₂-equivalent of coal across its full lifecycle. Even accounting for methane leakage risks, the industry must communicate this clearly to avoid misinformation and maintain social license to operate.

As Australia navigates its role in a rapidly evolving global energy landscape, insights like these help ACERA and our stakeholders understand not just where the market stands—but where it’s heading.