Economic and financialAatiraï Manickawasagar2025-12-02T11:02:18+00:00

lng impacts

the economic and financial risks

The LNG market is set to experience its largest wave of additional supply through to 2030.

The surge in supply is driven by the massive expansion of LNG capacity in North America — particularly in the US.

According to industry projections, this additional supply will be absorbed primarily by developing and emerging markets, particularly in the Asia Pacific region. However, this expected rise in demand may never materialize — posing significant risks for companies and banks betting on the growth.

LNG is expensive and increasingly uncompetitive.

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.

LNG does not ensure energy security and can create long-term dependencies.

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.

Case studies

Coral triangle

Asia Pacific

Vietnam – EDF’s Son My

Asia Pacific

Papua LNG

Asia Pacific

Argentina – LNG expansion in San Matías Gulf

South America

Brazil – Azulão complex

South America

Peru – Camisea and LNG expansion

South America

United States – CP2

North America

Rovuma LNG

Africa

Sardinia Gasification

Europe

End Support for LNG Expansion Now

We – NGOs fighting LNG expansion and communities affected by the LNG boom – call on banks to adopt comprehensive policies to end all financial services for new LNG projects, associated methane carriers, infrastructure, and LNG developers.

We call on insurers to stop providing coverage for new LNG export and import terminals.

We call on companies to immediately halt LNG expansion plans, which are having devastating impacts on communities, ecosystems, and the climate.

Need support for your campaign or information on the companies financing LNG expansion?

Peru’s gas gamble:

How Camisea and LNG expansion threaten the Amazon and Indigenous communities

Project overview

Peru is the second-largest fossil gas producer in Latin America after Argentina. The majority of the country’s output is from the Camisea gas field deep in the Amazon, which mainly serves two purposes:

It supplies the capital Lima and is one of the main sources of power generation in Peru.
It feeds Peru LNG — the only Latin American onshore export terminal.

The Peruvian government together with state-owned company Perupetro are advancing plans to expand fossil gas extraction to facilitate higher LNG exports, the proposed Southern Peru Gas Pipeline, the construction of a petrochemical complex, and likely the expansion of LNG truck-loading operations. Meanwhile, renewable energy advocates denounce a lack of political will to unlock Peru’s vast clean energy potential.

Source: Global Energy Monitor

The high costs of Peru’s gas expansion

Oil and gas extraction in Peru, especially in the Amazon, is linked to the violation of Indigenous communities’ rights, including those of isolated Indigenous peoples. These violations involve the dispossession of land, lack of benefits, numerous environmental damages and human rights violations.

The planned fossil gas production and LNG export expansions are a direct threat to the Amazon and to the communities and ecosystems located in the vicinity of gas infrastructure. In 2024, Perupetro opened new bidding processes for producing oil and gas blocks — 47 areas with exploration potential were highlighted across the country, including areas in the Camisea gas fields. Thirty-eight of these areas overlap with protected areas and indigenous lands.

20 years of broken promises in the Amazon

In 2024, the Camisea Gas Project marked 20 years of production. US archives published in November 2024 gave an insight on the ways the controversial project came into being and how it was considered at the time of implementation, given its huge environmental and social risks, corruption issues, and lack of financial transparency. The archives show that these elements combined to move the Export-Import Bank of the United States (EXIM) to vote against funding the project. However, by abstaining from a vote on Inter-American Development Bank (IDB) financing, the US nevertheless helped pave the way for the Camisea project to move forward. A whistleblower revealed in 2010 that the IDB covered up inadequacies and faults in the Camisea Gas Project to facilitate its financing.

Today, despite the transfer of multiple millions of dollars in revenue generated from Camisea to local regions, impacted communities must deal with the environmental impacts and still lack energy access.

In 2025, an investigation by French Disclose and France 24, RFI and the Pulitzer Centre revealed the widespread environmental and health damages caused by the Spanish company Repsol, which operates a site within the Camisea gas field. The investigation spotlighted constant gas flaring, the discharge of hydrocarbons into a river, and chemical burns suffered by local people. It also exposed the French bank Crédit Agricole and the significant financial gains it makes with this “dirty gas business in Peru”.

Pluspetrol Perú Corporation S.A is the Peruvian subsidiary of multinational Pluspetrol SA and the operator of the Camisea consortium.

In 2025, the Dutch National Contact Point (NCP) – following notification a submission by four Indigenous federations from Peru about alleged violations of the OECD Guidelines by Amsterdam-based Pluspetrol Resources Corporation – concluded that Pluspetrol had failed to act in line with OECD human rights and environmental standards

According to a Stand.earth’s report, at least 16 banks — including Citibank, JPMorganChase, Itaú Unibanco and HSBC — have provided funding to Pluspetrol’s local subsidiary, along with fellow consortium members Repsol and Hunt Oil Peru, within the last year.

Peru LNG terminal

The Camisea gas field feeds Peru’s operational onshore LNG export terminal, Peru LNG. The terminal, which has a capacity of 4.45 Mtpa, started operating in 2010. Of its US$3.9 billion total cost, the IDB financed US$400 million.

Numerous leaks and accidents, as well as negative impacts on human health, the environment and Indigenous communities, have been documented in connection with the Peru LNG pipeline and gas field operations.

Exports from the Peru LNG terminal increased in 2023 and 2024. The main destinations of the LNG in 2023 were the UK and South Korea, plus Japan, China, Spain, France, the Netherlands, and Canada. In 2024, cargoes went to the Netherlands, South Korea, China, Japan, Taiwan, France, Canada, the UK, and Thailand.

Until July 2025, the bulk of Peru LNG’s exports went to Asian markets. South Korea topped destination countries, followed by China, Japan, Singapore, and Taiwan. Spain was the main European destination, then France and the Netherlands.

Petrochemical complex and LNG trucks

Plans exist for more gas extraction in the Peruvian Amazon, linked to LNG exports, the proposed Southern Peru Gas Pipeline, the building of a petrochemical complex, and the likely expansion of LNG truck loading.

The Numay LNG project is an existing truck-loading facility at the Peru LNG export terminal where LNG is loaded for transportation to gas stations for use domestically.

As of November 2025, another Numay LNG project in San Andres, Peru, has been listed on the website of the US EXIM bank as a “pending Environmental Category A Project” — meaning it requires an Environmental and Social Impact Assessment. There is no further information available, however, and talks with local groups and research in the country has not been able to turn up any more information about the project.

The companies involved in Peru LNG

Name	Owners	Parent companies	Operator	Associated infrastructure
Peru LNG Terminal	Marubeni Corp. [10%]; Hunt Oil Company [35%]; MidOcean Energy LLC [35%]; Shell Plc [20%]	Shell Plc [20.0%]; Saudi Arabian Oil Co. [17.2%]; Marubeni Corp. [10.0%]; EIG Global Energy Partners LLC; Hunt Consolidated Inc.; Mitsubishi Corp; unknown	Hunt Oil	Camisea Gas Pipeline, Camisea gas fields

Source: Global Energy Monitor

Resources

Energy Shift Southeast Asia, SAVE Mekong Delta
Energy Shift Southeast Asia, Briefer: As the world transitions away from fossil fuels, Vietnam’s fossil fuel dependence grows – and the Mekong Delta is at stake, 15 November 2024

lng impacts

the economic and financial risks

LNG is expensive and increasingly uncompetitive.

LNG does not ensure energy security and can create long-term dependencies.

Case studies

Coral triangle

Vietnam – EDF’s Son My

Papua LNG

Argentina – LNG expansion in San Matías Gulf

Brazil – Azulão complex

Peru – Camisea and LNG expansion

United States – CP2

Rovuma LNG

Sardinia Gasification

End Support for LNG Expansion Now

Impacts

Companies

Financial backers

Back the campaign against LNG

The Coral Triangle under threat:

How LNG expansion endangers a global marine treasure

Project overview

Resistance on the ground

Resources

Fueling risk:

How the Son My LNG-to-Power Project chain threatens the Mekong Delta

Project overview

Resources

Papua LNG:

Climate, biodiversity, and community at risk

Project overview

Resources

Golfo Azul Para Siempre:

Defending Argentina’s San Matías Gulf from LNG expansion

Project overview

Resources

Azulão:

A gas megaproject threatening the Amazon and its peoples

Project overview

Resources

Peru’s gas gamble:

How Camisea and LNG expansion threaten the Amazon and Indigenous communities

Project overview

Resources

Decimating the coast:

The CP2 LNG terminal and the costs to Louisiana’s fishing communities

Project overview

Testimony

Rovuma LNG:

The cost of gas extraction in Cabo Delgado

Project overview

Resources

Sardinia gasification:

LNG dependence lock-in

Project overview

Resources

US, Japanese and European banks are driving LNG expansion