Free cookie consent management tool by TermsFeed

GCW 396 & 397 – The Fragmentation of Global Gas Markets: New Dependencies, New Risks

Global gas markets are undergoing a profound transformation, reshaping trade flows, supply strategies and energy security worldwide. Once dominated by predictable pipelines and long-term contracts, the sector is now increasingly fragmented, driven by geopolitical tensions, climate ambitions and rising technological demands. The war in Ukraine and Western sanctions on Russia have disrupted traditional export routes, forcing Europe, Asia and other regions to rethink dependencies. Meanwhile, the growth of liquefied natural gas (LNG) infrastructure, the rise of new suppliers and long-term procurement contracts are redefining market dynamics, creating both new opportunities and major concerns. Nations are diversifying supply sources, but they remain vulnerable to chokepoint disruptions, aging infrastructure, cyberattacks and price volatility.

In Europe, the EU is taking decisive steps to end reliance on Russian gas, with plans to phase out all pipeline and LNG imports from Moscow by 2027. Pipeline transit through Ukraine ended in January 2025, leaving TurkStream as the main conduit, carrying roughly 16.3 bcm in the first 11 months—far below pre-war levels of 175–180 bcm. Germany is expanding LNG import capacity through terminals in Stade, Wilhelmshaven, Mukran and Brunsbüttel. These projects combine floating storage regasification units (FSRUs) with land-based infrastructure. Italy’s Eni (Ente Nazionale Idrocarburi ) signed a 20-year deal with US Venture Global LNG, marking the first long-term contract for US gas in Italy, while Norway continues to supply pipeline gas despite production issues and sabotage concerns. Turkey and Serbia are balancing pipeline reliance with growing LNG imports, storage expansions and new routes, including nuclear projects, to enhance resilience.

Turning to Asia and the Gulf, these regions are shaping a second major axis of global LNG growth. Although Asian imports are expected to fall slightly in 2025 – the first decline since 2022—long-term contracts remain central. On 4 December, South Korea’s POSCO International (Pohang Iron and Steel Company) signed a 20-year Alaska LNG deal. Japan’s JERA (Japan’s Energy for a New Era) a will begin exporting LNG to India in 2027, marking a strategic pivot for the country. China continues to prioritize pipeline imports from Russia and domestic gas production, leaving more LNG available for other Asian importers. The Gulf, led by Qatar and the UAE, is expanding LNG capacity to meet global demand fueled by data centers, AI and industrial growth, with Qatar aiming to become the world’s largest LNG producer by 2027.

Africa and Latin America are emerging as new players. In Mozambique, TotalEnergies and partners injected additional equity into the LNG project after UK and Dutch export-credit agencies withdrew support in early December 2025. Senegal announced plans to nationalize the Yakaar-Teranga gas project on 10 December, while the Republic of the Congo accelerated its FLNG (Floating Liquefied Natural Gas) Nguya facility, expected to begin operations in early 2026. In Latin America, Argentina’s YPF (Yacimientos Petrolíferos Fiscales), in partnership with Eni and ADNOC XRG (Abu Dhabi National Oil Company), plans a 12 mtpa (million tonnes per annum) LNG export project by 2030–2031, and Southern Energy signed an eight-year deal with Europe’s SEFE (Securing Energy for Europe). US LNG exports to the region continue rising, more than doubling in February 2025.

Global energy infrastructure, however, faces persistent risks. Europe’s Balticconnector pipeline and other assets are vulnerable to sabotage, while critical maritime chokepoints such as the Strait of Hormuz, Bab el-Mandeb and the Panama Canal are essential yet exposed. Aging pipelines, compressors and LNG terminals, combined with cyber threats to shipping logistics and terminal operations, increase the potential for supply disruptions. Seasonal demand spikes, geopolitical tensions and market competition exacerbate these risks, underscoring the fragility of global gas networks.

Ultimately, the global gas market is becoming increasingly fragmented, with Europe dependent on US LNG and pipeline alternatives, Russia pivoting eastward to Asia, Asia diversifying procurement strategies and Africa and Latin America emerging as new players. Rising infrastructure risks, market competition and geopolitical pressures are shaping the new dependencies in energy security in 2025 and beyond. The era of predictable flows has ended, replaced by a complex and competitive landscape where resilience, diversification and strategic planning are more critical than ever.

Join us for Global Crisis Watch 396 & 397 as we dive into the latest trends in global gas and LNG markets, shifting supply patterns and the risks facing energy infrastructure. We’ll explore how the world is adapting to new dependencies and what this means for energy security worldwide.

Linkedin Envelope