Global LNG, redefined
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Private Equity
Published
May 19, 2026
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5 mins
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Matt Willer
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Global liquid natural gas (LNG) markets are navigating a period of heightened uncertainty, shaped by geopolitical disruption, shifting supply dynamics and evolving long‑term demand from artificial intelligence (AI) data centers.

 

To better understand how these forces are influencing natural gas pricing and investment risk, we spoke with Matt Willer, managing director of natural resources private equity at Aegon Asset management, about where LNG demand is headed and how investors should be positioning their portfolios as they navigate the volatility.

 

The Qatar disruption and supply reorientation

Q: In the wake of QatarEnergy’s decision to halt LNG production following attacks on the Ras Laffan facility¹, do you see the resulting buyer diversification away from Qatar as a temporary reaction or a permanent structural shift? And can North American producers realistically serve as a long-term backstop?

 

The disruption lowers available supply and changes pricing dynamics until the Strait of Hormuz is reopened. For now, I view the shift in buyer behavior away from Qatar as temporary—assuming there are no additional attacks on Qatari infrastructure. The duration and ultimate impact really hinge on how long the Iran conflict persists and whether it escalates further.

 

In the near term, this is largely a supply-driven market response. Reduced LNG volumes from countries affected by conflict and transit blockages have tightened availability, which has pushed prices higher—particularly in Asia. Buyers are responding to immediate security and delivery risks rather than making long-term strategic reallocations.

 

US production could help offset some of the lost supply, but infrastructure remains the limiting factor. We likely don’t have sufficient LNG train2 capacity to move incremental volumes onto the water at scale. Those trains are essential for converting dry natural gas into LNG for export, and while additional US capacity is coming online—with new trains under construction and more expected in the coming years—it still won’t fully replace the volumes moving through established LNG hubs in the Strait of Hormuz region. So, even with new projects coming online, North America can’t serve as a complete long-term backstop for that supply in the near to medium term.

 

Supply and its pricing implications

Q: Prior to the Iran conflict, global LNG supply was expected to grow more than 7% in 2026 — its fastest pace since 2019.3 Where do you see the floor on natural gas prices and how do you expect producers to navigate margin compression as new supply comes online?

 

LNG supply growth is ultimately constrained by how quickly new LNG trains are brought online. There’s a significant amount of capacity under development and those projects will need to pull gas from US domestic production—which is plentiful. In that respect, global LNG growth is creating an additional demand outlet for US natural gas producers and expanding the addressable market for their supply.

 

Over the longer term, that dynamic should support higher domestic natural gas prices relative to where they might otherwise be. Does it create a price floor? Yes, to some extent—but I don’t have a strong conviction around where that floor ultimately settles. The sheer amount of natural gas in the US system makes it difficult to anchor prices at a specific level.

 

Even with rising LNG export demand, US gas pricing remains highly dependent on weather patterns, regional infrastructure constraints and location‑specific dynamics. Those factors continue to drive volatility and they can overwhelm broader supply‑and‑demand trends over shorter time horizons. As a result, LNG growth may provide longer‑term support, but it doesn’t eliminate near‑term pricing pressures or margin compression for producers.

 

Geopolitical risk as a structural investment factor

Q: Between the Iran conflict, Russian Arctic LNG sanctions and the EU's planned phase-out of Russian gas imports by 2027,4 geopolitical risk has become a near-constant in LNG markets. How should investors approach that risk?

 

Investors can manage geopolitical risk by positioning their exposure in relatively stable markets, and from that perspective, the US stands out right now. Long term exposure to US natural gas offers a more attractive risk profile compared to regions where supply is increasingly influenced by conflict, sanctions or shifting policy frameworks.

 

By focusing on US production and infrastructure, investors can reduce their exposure to geopolitical disruptions tied to conflict zones or politically sensitive supply routes. While no market is risk free, the US natural gas market benefits from more predictable regulatory structures, greater transparency and a lower likelihood of sudden supply interruptions. Over the long term, that stability can be especially valuable as geopolitical uncertainty becomes a more persistent feature of global LNG markets.

 

Demand durability: Asia and AI

Q: J.P. Morgan projects China's LNG demand growth will slow to a 5% to 7% compound annual growth rate through 2030 as domestic production catches up,5 while the buildout of AI data centers is emerging as a significant new source of domestic natural gas demand. How do you weigh those two forces when thinking about where long-term LNG demand is headed?

 

It largely depends on how quickly AI adoption accelerates and how rapidly data centers are built out—not just in China but worldwide—because AI is extremely energy‑intensive. That energy doesn’t have to come from natural gas. Power can be generated from coal and other sources. But right now, natural gas is the most readily deployable and scalable option in many markets.

 

China is still mining and relying heavily on coal, but as AI adoption increases, additional sources of energy will be needed, and natural gas is likely to be part of that mix. The same dynamic applies in the US. The key variables are the pace of data center construction, how quickly AI applications are adopted and whether energy infrastructure—particularly natural gas pipeline networks—is sufficient to support that growth.

 

Ultimately, long‑term LNG demand will be shaped by where these data centers are built, how fast they scale and which energy sources are most accessible in those regions. The balance between domestic supply growth and AI‑driven demand will vary by geography, making the outlook less about a single global trajectory and more about localized infrastructure and energy availability.

 

Long-term viability: LNG vs. the energy transition

Q: Some institutional investors argue that new LNG projects need gas priced below $5/MMBtu to outcompete renewables for power generation—a level many new projects can't achieve on a cost basis⁶—and that LNG infrastructure built today carries meaningful stranded-asset risk beyond 2030. How do you see that scenario playing out and where do you see long-term LNG demand?

 

Natural gas is clearly part of the energy transition, even if it isn’t as clean as renewables. The key difference is consistency. Renewables, at least at scale today, don’t yet provide the level of reliable, baseload power that the grid requires, whereas natural gas does. From that standpoint, natural gas—and by extension LNG—continues to play an important role in the transition, particularly as demand for reliable power grows.

 

That said, the real question is whether renewables can eventually deliver consistent power at scale. Right now, they can’t, largely due to bottlenecks around infrastructure, grid interconnectivity and the ability to move electricity efficiently to where it’s needed. Until those issues are resolved, natural gas remains a necessary bridge fuel, even if pricing and economics are increasingly challenged.

 

Do LNG terminals and related infrastructure carry meaningful stranded‑asset risk? Yes, I think they do. As a result, some investors choose to avoid direct investment in LNG infrastructure such as terminals, ports or liquefaction trains. Instead, exposure can be focused on providing the natural gas that ultimately gets turned into LNG. That positioning allows participation in long-term natural gas demand, while avoiding the project-level risk associated with large, long dated LNG assets.

 

US natural gas prices

Q: Despite heightened geopolitical risk in the Middle East, US natural gas prices have barely moved. What factors—such as supply dynamics, storage levels or LNG export constraints—help explain this muted price response?

 

The muted price response in the US is largely weather‑related. We didn’t experience a particularly cold winter and the spring has been relatively mild, which has kept localized demand for natural gas—especially for power generation—lower than it might otherwise have been.

 

While AI data centers are beginning to come online, they haven’t yet created the type of demand pressure that materially stresses the power system or drives incremental natural gas consumption at scale. That demand is building, but so far it hasn’t been enough to move pricing meaningfully.

 

More broadly, the biggest factor influencing US natural gas prices is supply. The US simply has an abundance of natural gas and that depth of supply has helped absorb geopolitical shocks elsewhere in the world. Even amid heightened global uncertainty, domestic fundamentals—ample production, moderate demand and sufficient storage—have kept US prices relatively insulated.
 

1International Energy Agency, “Global LNG Capacity Tracker,” March 17, 2026
2An LNG train is an independent liquefaction unit within an LNG facility that treats, cools and converts natural gas into liquefied natural gas for storage and export. 
3International Energy Agency, “Growth in Global Demand for Natural Gas Is Set to Accelerate in 2026 as LNG Wave Spreads through Markets,” News release, January 23, 2026.
4Ibid. 
5J.P. Morgan, “What Is Liquefied Natural Gas, and Why Is It So Important?,” Global Research, February 20, 2025.
6Mona Dohle, “Shell’s Bullish LNG Outlook Faces ‘Fundamental Flaws,’ Investors Warn,” Net Zero Investor, March 16, 2026.

Important disclosures

Author

Matt Willer
Managing Director, Natural Resources Private Equity
Matt Willer is Managing Director, Natural Resources Private Equity focusing on energy and natural resources. He has been responsible for investment sourcing, due diligence, asset management and financial reporting since 2007.  
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