Many countries in the Asia Pacific region already access domestically produced coal and/or natural gas at much lower costs than LNG. While local reserves decline, a shift toward renewable sources of power is likely — the decreasing costs of renewables, especially when paired with battery storage, also make LNG an increasingly uncompetitive option. Meanwhile, gas and LNG consumption in European countries is expected to decline from 2025 — a trend likely to continue due to energy efficiency measures and the growth of renewable energy.

Countries relying on LNG face exposure to volatile spot market prices, as the LNG market is known for its high price fluctuations. Alternatively, they often commit to long-term « take-or-pay » contracts that are difficult to renegotiate or exit — Pakistan’s current attempts to revise its LNG contracts with Qatar are a case in point. This dependency adversely affects the prices people pay for their energy, including in exporting countries.

Major consultancy firms, international organizations, industry leaders, and independent experts have flagged the risk of overcapacity and a potential supply glut. This could result in recently built LNG methane carriers and terminals becoming stranded assets in a few years: in importing regions like Europe; in both importing and exporting countries such as those in Latin America (if the region is to meet its climate objectives); and in exporting countries like Canada and Australia. Both overcapacity and a supply glut would pose significant financial risks to financial institutions and the companies behind LNG projects.

In the short term, some experts have voiced concern about a possible market bubble – in a context where several projects in Vietnam and the Philippines are delayed due to regulatory, financial, and turbine supply challenges.