Major LNG wave to alter energy market dynamics, benefit Asia: IEA

A "major wave" of LNG is coming to the energy market, and the sharp rise in supply will change market dynamics globally, International Energy Agency Executive Director Fatih Birol said at an industry event in Singapore on Oct. 27.

Birol said at the Singapore International Energy Week, or SIEW 2025, that an "unprecedented level" of LNG is coming from the US, Canada, Australia and Qatar.

As a result of the expected oversupply, LNG markets are turning from sellers' markets to buyers' markets, which is pushing LNG prices down, Birol said, benefiting LNG importers in Asia.

Platts, part of S&P Global Commodity Insights, assessed the December JKM, the benchmark price for LNG cargoes delivered to Northeast Asia, at $11.102/MMBtu on Oct. 27, down 13.4 cents, or 1.19%, day over day.

"Platts JKM prices are forecast to average $8.8/MMBtu in summer 2026, dropping from winter 2025-26 as the ramp-up of new liquefaction capacity expands supply," analysts at Commodity Insights said in an October report.

Global LNG supply is forecast to increase 10% year over year in 2026, driven by the ramp-up of new liquefaction in the US and Canada and the startup of Qatar's North Field East expansion project, according to the analysts.

Birol said electricity consumption is witnessing very strong growth, not only in emerging economies but also in advanced countries.

In September, the IEA said in a statement that electricity demand in Southeast Asia grew more than 7% year over year in 2024, nearly double the global average, and is set to double again by 2050.

Birol said the surge in electricity demand is coming from artificial intelligence and data centers, which are mushrooming across Europe.

Air conditioners are also a major driver of rising power demand, Birol said.

Birol said the air conditioner market penetration in terms of usage is already quite high in countries such as Japan and the US.

Due to the increase in temperatures caused by climate change and the rising income levels, many people, particularly in emerging economies, are also buying air conditioners, according to Birol.

Electric cars are also significantly increasing electricity consumption, in addition to AI and air conditioners, Birol said, adding that globally, over 25% of all new car sales are electric.

To meet this growing electricity consumption, electricity demand from renewables is growing, with many countries in Southeast Asia looking at solar, wind, geothermal, hydropower and other sources.

"We are expecting nuclear to make a strong comeback," Birol said, pointing to the potential of nuclear-powered gas and small modular reactors.

According to Birol, Southeast Asia is set to stay a fundamental part of the global energy system.

"Based on today's policy settings, Southeast Asia is on course to account for 25% of global energy demand growth between now and 2035, second only to India over the period and more than double the region's share of growth since 2010," the IEA said in its Southeast Asia Energy Outlook 2024 report.

Birol said building power grids in the region is vital for enhancing energy security, adding that critical minerals are also very important for the energy world.

Ultimately, the "golden rule" for energy security is energy diversification, Birol said.