U.S. LNG Export Surge Resets Global Gas Price Floor Through 2031
Projects reaching final investment decision in 2025 locked in more than 2.8 trillion cubic feet of annual U.S. export capacity, with S&P warning that any curtailment would tighten global LNG markets significantly by 2031.
Projects totalling more than 2.8 trillion cubic feet of annual U.S. export capacity reached final investment decisions during 2025, according to Oilprice.com reporting published Thursday (2026-07-24), cementing a supply wave that is already reshaping how global gas markets price risk beyond the mid-decade.7
S&P Global's study, released in mid-July, found that U.S. LNG exports are expected to average around 17 billion cubic feet per day in 2026 and rise again in 2027 as additional capacity enters service. That volume is already large enough to shift price correlations between American and international gas benchmarks. NYMEX Henry Hub front-month settled Friday (2026-07-25) at $2.87 per MMBtu, while Asian JKM stood at $22.00 per MMBtu — a spread that continues to drive American cargoes eastward and compress the flexibility that European buyers once relied on.7
S&P's work goes further than a supply forecast. The firm argued that flexible U.S. LNG has converted export infrastructure into a domestic gas price shock absorber, meaning the shale resource base now functions as a pressure valve for both domestic oversupply and international demand spikes simultaneously. Daniel Yergin, S&P's vice chairman, said U.S. LNG growth is exceeding all expectations. The assessment carries weight given the pace of FID activity since the Biden-era pause was lifted in January 2025.6
The tightening scenario S&P modelled is specific. Under what the firm termed an "Extended Pause" — where none of the investment committed since 2025 was ultimately realised — global LNG markets would tighten significantly by 2031, S&P said. Given that the capacity already has FIDs behind it, that scenario functions more as a stress test than a base case. But it does quantify the systemic exposure if permitting reversals, financing gaps, or contractor bottlenecks delayed even a portion of the sanctioned volume.5,6
S&P also projected that LNG will become the second-largest net export industry in the United States within five years, with growth expected to support 555,000 jobs annually and add $1.4 trillion to GDP through 2040. New England and New York markets could see energy cost reductions of around 20% during the 2028–2031 period, according to the study.4,5
The domestic production side supports the export build-out numerically. EIA data from its May 2026 Short-Term Energy Outlook showed marketed natural gas production in the Lower 48 averaged 117.2 Bcf/d in the first quarter of 2026, up 4% year-on-year. The EIA forecast a further 3% increase for the full year, with Permian output projected at 29.2 Bcf/d — 6% above 2025 levels — and the Haynesville, which feeds Gulf Coast LNG terminals directly, growing 6% this year and 8% in 2027.1
But production growth cuts both ways. Morgan Stanley expects Lower 48 supply growth of roughly 3 Bcf/d this year following spring maintenance disruptions. That supply recovery, combined with export capacity additions, is part of why the near-term consensus leans bearish on NYMEX Henry Hub front-month — 20 signals in the packet show a bearish weight of 0.618 against a bullish weight of 0.360. The contrarian case, flagged by two separate policy and supply signals, points to potential upside if LNG feedgas demand accelerates faster than the market currently prices.2
Wood Mackenzie takes a longer view. The firm's analysts concluded that the era of cheap U.S. gas is ending, with Henry Hub prices seen approaching $5 per MMBtu by 2035 as AI data centre electricity demand and LNG export expansion drive structurally higher consumption. Prices held near historically low levels for most of the decade through 2025, WoodMac noted, but the combination of demand vectors now loading the system is different in kind from anything the market has previously absorbed.3
ICE Endex TTF front-month closed Friday (2026-07-25) at €63.76 per MWh, roughly three times the Henry Hub equivalent on an energy basis. That arbitrage differential is what continues to pull U.S. cargoes into Europe and Asia, validating the investment thesis behind the 2025 FID wave. Whether spot LNG prices at JKM's current $22.00 per MMBtu are high enough to incentivise further capacity beyond what has already been sanctioned is a question the market will test as the build-out progresses.
The unresolved risk is construction and schedule execution. S&P's Extended Pause scenario may be low-probability given committed FIDs, but project delays — through labour shortages, equipment lead times, or permitting litigation — could produce a partial version of the same tightening. By 2031, any gap between sanctioned and delivered capacity will show up in JKM first.6,7