Increase in Premiums for 2025 LNG Contracts Following Trump’s Victory

Increase in Premiums for 2025 LNG Contracts Following Trump’s Victory

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The impact of Donald Trump’s victory in the U.S. presidential election is particularly evident in the LNG (liquefied natural gas) contracts for 2025. The premiums for Cal-2025 contracts for the European TTF (Title Transfer Facility) benchmark gas reached a year-high of 7.65 EUR/MWh on November 11, 2024, before slightly decreasing to 7.22 EUR/MWh on November 12. This sharp increase in premiums for 2025 contracts over 2026 is due to several factors, including uncertainty over Trump’s future policies, concerns about supply security, and delays in liquefaction projects.

Factors Influencing the Increase in Premiums

The increase in premiums can be attributed to several key factors. First, the market anticipates strong near-term demand, fueled by geopolitical uncertainties, including U.S. tariffs—especially on China—and potential protectionist policies from the Trump administration. These uncertainties weigh heavily on market stability, and market participants are seeking to protect themselves against heightened volatility, thus driving up premiums for 2025 contracts.

Second, delays in major liquefaction projects like the Golden Pass project in the United States, initially expected for 2024 but now delayed to 2025 or even 2026, contribute to supply tensions for LNG in 2025. Analysts believe these delays could push prices higher for this contract period.

Uncertainty Regarding Gas Transit Through Ukraine

Another source of uncertainty affecting the market is the situation surrounding gas transit through Ukraine, which is expected to see its contract expire at the end of 2024. Speculation about a new transit agreement between Ukraine and Azerbaijan further fuels uncertainty about gas supply. The lack of clarity regarding the future of gas flows between these countries directly impacts the pricing of future contracts.

Meanwhile, the expansion of liquefaction capacity in Qatar, with new liquefaction trains being constructed at the QatarEnergy LNG project at Ras Laffan, which is expected to be commercially operational in 2026, is likely to ease the supply situation by 2026. However, expectations for LNG demand, particularly from countries like Brazil and Egypt, continue to keep upward pressure on prices for 2025.

The Price Trend for 2025

The rise in premiums for 2025 also reflects strong expected demand, with countries like Brazil and Egypt actively seeking to secure LNG on the international market. These nations, facing declining hydroelectric reserves and decreasing domestic natural gas production, find themselves needing to buy more LNG, further contributing to upward pressure on 2025 contract prices.

NextDecade has signed a liquefied natural gas supply agreement with EQT for 1.5 million tonnes annually from Rio Grande LNG Train 5, pending a final investment decision.
Sawgrass LNG & Power has renewed its liquefied natural gas supply agreement with state-owned BNECL, consolidating a commercial cooperation that began in 2016.
Gazprom and China National Petroleum Corporation have signed a binding memorandum to build the Power of Siberia 2 pipeline, set to deliver 50 bcm of Russian gas per year to China via Mongolia.
Permex Petroleum signed a $3 million purchase option on oil and gas assets in Texas to support a strategy combining energy production and Bitcoin mining.
Enbridge announces the implementation of two major natural gas transmission projects aimed at strengthening regional supply and supporting the LNG market.
Commonwealth LNG’s Louisiana liquefied natural gas project clears a decisive regulatory step with final approval from the U.S. Department of Energy for exports to non-free trade agreement countries.
The Indonesian government confirmed the delivery of nine to ten liquefied natural gas cargoes for domestic demand in September, without affecting long-term export commitments.
The Egyptian government signs four exploration agreements for ten gas wells, allocating $343mn to limit the impact of the rapid decline in national production.
Hungary has imported over 5 billion cubic metres of Russian natural gas since January via TurkStream, under its long-term agreements with Gazprom, thereby supporting its national energy infrastructure.
U.S. regulators have approved two major milestones for Rio Grande LNG and Commonwealth LNG, clarifying their investment decision timelines and reinforcing the country’s role in expanding global liquefaction capacity.
Hokkaido Gas is adjusting its liquefied natural gas procurement strategy with a multi-year tender and a long-term agreement, leveraging Ishikari’s capacity and price references used in the Asian market. —
Korea Gas Corporation commits to 3.3 mtpa of US LNG from 2028 for ten years, complementing new contracts to cover expired volumes and diversify supply sources and price indexation.
Petrobangla plans to sign a memorandum with Saudi Aramco to secure liquefied natural gas deliveries under a formal agreement, following a similar deal recently concluded with the Sultanate of Oman.
CTCI strengthens its position in Taiwan with a new EPC contract for a regasification unit at the Kaohsiung LNG terminal, with a capacity of 1,600 tonnes per hour.
Exxon Mobil forecasts sustained growth in global natural gas demand by 2050, driven by industrial use and rising energy needs in developing economies.
Capstone Green Energy received a 5.8-megawatt order for its natural gas microturbines, to be deployed across multiple food production facilities in Mexico through regional distributor DTC Machinery.
Private firm Harvest Midstream has signed a $1 billion acquisition deal with MPLX for gas processing and transport infrastructure across three western US states.
Sempra Infrastructure and EQT Corporation have signed a 20-year liquefied natural gas purchase agreement, consolidating Phase 2 of the Port Arthur LNG project in Texas and strengthening the United States’ position in the global LNG market.
Subsea7 was selected to lead phase 3 of the Sakarya gas field, a strategic contract for Türkiye’s energy supply valued between $750mn and $1.25bn.
Tokyo protests against Chinese installations deemed unilateral in a disputed maritime zone, despite a bilateral agreement stalled since 2010.

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