(Investing) – Liquefied natural gas (LNG) prices are set to come under sustained pressure in 2026 as the market absorbs the largest supply wave in the industry’s history, Bernstein analysts said in a note published on Friday.
Analysts led by Neil Beveridge forecast global LNG demand to rise to around 441 million tonnes per annum (mtpa) in 2026, up about 8.5% year on year. Growth is expected to be driven almost entirely by Asia, while Europe’s LNG imports are seen stabilizing near 120 mtpa, assuming only a limited return of Russian pipeline gas.
In 2025, European imports surged as inventories were rebuilt and Russian flows were displaced, while LNG demand fell across key Asian markets including China, Japan and India due to weaker gas consumption growth and higher domestic and pipeline supply.
On the supply side, 2026 marks a turning point. Bernstein highlights that around 45 mtpa of new LNG capacity began ramping up in 2025, with another 48 mtpa scheduled to start up in 2026.
Major projects coming online include Golden Pass LNG, Qatar’s North Field Expansion phases, Scarborough and Nigeria LNG Train 7. Combined, roughly 93 mtpa of new capacity is expected to enter the market across 2025 and 2026.
As a result, Bernstein expects the LNG market to revert to net long from 2026 onward, with supply additions averaging around 50 mtpa per year through 2028.
Adjusting for ramp-ups, the broker estimates that about 150 mtpa of incremental LNG supply will hit the market between 2026 and 2028, equivalent to adding roughly 35% of current global demand in just three years.
“This will get absorbed by the market, but at lower prices,” the analysts wrote. “This shift from a sellers to a buyers market benefits downstream gas companies over upstream supplier.”
The team forecasts spot LNG prices to fall from around $12 per mmbtu in 2025 to average about $9 per mmbtu over 2026 to 202.
Prices remain elevated for now due to lower European gas inventories and seasonal heating demand, the analysts added, but see these supports fading as new supply ramps up.
If incremental volumes cannot be absorbed, the downside risk is significant, with spot prices potentially falling toward the marginal cash cost of LNG supply, estimated at $5 to $6 per mmbtu, raising the risk of production shut-ins in North America.
Meanwhile, upside risks include higher Henry Hub gas prices, as stronger domestic demand in the U.S. could constrain LNG exports and tighten the global market.
Bernstein also flags that the wave of new supply is likely to slow the pace of new project sanctions.
After a record year in 2025, when around 68 mtpa of projects reached final investment decision, the broker expects fewer approvals in 2026 as the JKM–Henry Hub price spread has narrowed. Only the lowest-cost projects are likely to advance in the near term, with higher-cost or marginal developments facing deferral.
While the near-term outlook is dominated by oversupply and lower prices, analysts stress that longer-term demand growth remains intact. Asia is expected to account for the vast majority of LNG demand growth through 2030, supported by coal-to-gas switching and energy security policies.
