LNG Exports and Power Demand Transform US Natural Gas Market

The US natural gas market is undergoing significant changes, driven by growing demand and shifting infrastructure needs. Over the past decade, demand has grown at an average annual rate of 4.1%, primarily due to LNG exports and increased gas-fired power generation.

Looking ahead, Deloitte estimates that demand growth will continue at a rate of 2.8% to 4.1% annually through the mid-2030s, driven by the power sector and LNG exports.

The concentration of demand growth is shifting, with LNG exports and large power users creating new pockets of concentrated demand. By 2035, LNG exports could exceed 30 billion cubic feet per day (bcfd), concentrating more than 35% of total US demand in just two states: Texas and Louisiana.

The flexibility of LNG export facilities and AI infrastructure-driven gas-fired power demand will significantly impact infrastructure requirements and local price dynamics. As global pricing becomes a larger factor, the potential for higher, more volatile hub prices increases, which could incentivize new infrastructure buildout.