LNG and AI to drive US natural gas use to new records

Demand for US natural gas is expected to continue climbing to record highs amid increased use of LNG and AI, industry executives told Reuters at the CERAWeek conference in Houston held from March 10-14.

The world’s biggest gas producer is expected to continue to hold top spot well into the future on the back of soaring demand for LNG, of which it is also the world's largest producer. US government data forecasts that the country is expected to produce about 105.2bn cubic feet (3bn cubic metres) per day of gas in 2025.

Since exporting its first LNG cargo in 2016, US LNG exports have risen every year, and this trend is projected to continue for the years ahead as a plethora of new projects come online. Additionally, President Trump’s pro-fossil fuel stance is also boosting the outlook for LNG exports.

The US currently boasts LNG production capacity of 13.8 bcf (388mn cubic metres) per day. However, by 2028, this figure is expected to nearly double to 24.7 bcf (699 mcm) per day.

Meanwhile, projects that appeared stuck in limbo are also now getting the greenlight from the Trump administration. In February, Trump gave the greenlight to restart LNG export permit approvals.

The first project to be granted a permit to export to non-Free Trade Agreement (FTA) countries was the 9.5mn tonnes per year (tpy) Commonwealth LNG project. Eleven more LNG projects that are currently stalled could also get back on track.

And while the market conditions are ripe for LNG exports in the US, global demand is also soaring. In February, supermajor Shell forecast global demand for LNG to rise by about 60% by 2040.

A key driver of this trend is rising power demand globally, spurred by increased adoption of AI and the increase in numbers of power-hungry data centres. Renewable energy giant NextEra Energy forecasts a 55% climb in power demand in the next 20 years, with 17% of the demand growth attributed to the shift to AI.