What is the primary reason for the projected LNG supply shortfall?

The primary reason is the anticipated near doubling of global LNG demand by 2035, particularly from the Pacific coastal region and Asia, which is expected to outpace the current and planned expansion of liquefaction capacity. This imbalance between rapidly growing consumption and slower supply development creates the projected deficit.

Which specific regions are expected to be most affected by this LNG crunch?

Inpex specifically identifies the Pacific coastal region, which includes key Asian markets, as the area most likely to experience this LNG supply shortfall. This encompasses major importers like Japan, South Korea, China, and India, all of whom are significant consumers of LNG.

How might this forecast influence investment decisions in the LNG sector?

This forecast is a strong signal for increased investment in new LNG liquefaction projects and associated infrastructure. It will likely encourage energy companies and national oil companies to accelerate final investment decisions on proposed projects, as the market clearly indicates a need for substantial new supply to meet future demand.

OilPrice · February 12, 2026 (Feb 12) · 1 min read

Inpex Warns Of Looming LNG Crunch in Asia

Analysis

OilCyprus Editorial

Japanese energy giant Inpex has projected a significant LNG supply shortfall in the Pacific coastal region, encompassing major Asian markets, by 2035. This warning, detailed in their 2025 earnings report, anticipates global LNG demand nearly doubling to 700 million tons annually, far outpacing current and planned supply expansions. The forecast highlights an urgent need for substantial new liquefaction investments to avert a critical energy security challenge in a rapidly growing consumption hub.

Key Facts

Japan's Inpex foresees an LNG supply shortfall in the Pacific coastal region, including Asia, by the year 2035.
The projection indicates that global LNG demand is expected to nearly double from current levels by 2035.
Total global LNG demand is anticipated to reach approximately 700 million tons per year.
The warning was issued by Inpex in its 2025 earnings report.
The Pacific coastal region, including Asia, is identified as the primary area facing this impending supply deficit.
Inpex is a major oil and gas company based in Japan.

Background & Context

The global energy landscape has seen a sustained shift towards natural gas as a cleaner transition fuel, particularly in Asia, where economic growth and industrialization drive increasing power demand. LNG has become a crucial component of energy security strategies, allowing countries without domestic gas resources to access global supply. Recent years have witnessed significant market volatility, exacerbated by geopolitical events and underinvestment in new supply, leading to heightened awareness of supply chain vulnerabilities and the critical role of long-term planning.

Market Impact

This projection from a major player like Inpex signals a strong imperative for accelerated investment in new LNG liquefaction and regasification infrastructure globally. The anticipated crunch will likely intensify competition for long-term supply contracts, potentially driving up prices and favoring producers with robust expansion plans. For major Asian economies, this forecast underscores the urgency of diversifying supply sources and securing future volumes to mitigate economic and energy security risks, potentially leading to increased strategic partnerships and equity investments in upstream projects.

What to Watch

The industry will closely monitor final investment decisions (FIDs) on new liquefaction projects, particularly in North America, Qatar, and Africa, which are crucial for bringing new supply online by the mid-2030s. Expect intensified negotiations for long-term LNG purchase agreements as buyers seek to de-risk future supply. Geopolitical developments and evolving energy policies will also play a significant role in shaping the pace and direction of these investments.

Frequently Asked Questions

What is the primary reason for the projected LNG supply shortfall?: The primary reason is the anticipated near doubling of global LNG demand by 2035, particularly from the Pacific coastal region and Asia, which is expected to outpace the current and planned expansion of liquefaction capacity. This imbalance between rapidly growing consumption and slower supply development creates the projected deficit.
Which specific regions are expected to be most affected by this LNG crunch?: Inpex specifically identifies the Pacific coastal region, which includes key Asian markets, as the area most likely to experience this LNG supply shortfall. This encompasses major importers like Japan, South Korea, China, and India, all of whom are significant consumers of LNG.
How might this forecast influence investment decisions in the LNG sector?: This forecast is a strong signal for increased investment in new LNG liquefaction projects and associated infrastructure. It will likely encourage energy companies and national oil companies to accelerate final investment decisions on proposed projects, as the market clearly indicates a need for substantial new supply to meet future demand.

Read on OilPrice