Cheniere's Outlook on U.S. LNG's Next Wave of Demand, Supply & Risks

Per Reuters, Cheniere Energy, Inc. LNG anticipates a transformative increase in U.S. natural gas usage for liquefied natural gas (“LNG”) production. According to the company’s Chief Commercial Officer Anatol Feygin, LNG plants could consume up to 40 billion cubic feet per day(bcfd) in the coming years — more than double today’s record of 18 bcfd. He notes that the industry has experienced similar surges before, as seen in 2022-23, when post-COVID demand recovery pushed New York Mercantile Exchange prices into the high single digits before supply quickly responded. This adaptability, Cheniere believes, will again help the market accommodate rising LNG demand.

Global Demand Remains Resilient in Asia

Despite fears of oversupply as new global LNG capacity launches, Cheniere sees emerging Asian buyers — notably Bangladesh and Pakistan — absorbing volumes when prices soften. Feygin highlights that affordability will bring these economies back into the LNG fold. Globally, the world will need 30 million metric tons of new LNG supply every year, with the United States expected to provide the bulk of this growth. For Cheniere, this reinforces the company’s confidence in long-term structural demand.

Rising Construction Costs Are Shaping Investment Decisions

Construction inflation is reshaping how and when LNG projects reach Final Investment Decision (FID). Feygin explains that over two-thirds of the FIDs taken this year were rushed to secure expiring fixed-price EPC contracts, as delaying would significantly increase development costs. Cheniere views this trend as evidence of both strong developer appetite and the urgency to lock in manageable project economics.

Cheniere’s Position Amid Rising LNG Outlook

In its third-quarter earnings release, Cheniere stated that it maintains a strong competitive edge even as new global LNG capacity ramps up, supported by its early-mover position, reliable operations and cost-efficient Gulf Coast logistics. Its brownfield expansions at Sabine Pass and Corpus Christi are paced to match long-term demand growth, particularly in Asia. With over 90% of 2026 volumes secured under long-term, take-or-pay contracts with investment-grade buyers, Cheniere benefits from predictable cash flows and reduced exposure to price swings. This stability reinforces its ability to deliver steady earnings and support disciplined capital returns.
 

Contracting Risks May Test the Next Generation of LNG Players

While the U.S. LNG sector could eventually scale to 300 million tons per annum, Cheniere warns that not all producers are equally prepared. Only 17% of this year’s new capacity has long-term contract coverage — a red flag for portfolio players exposed to market swings. The company emphasizes disciplined contracting and commercial readiness as key differentiators that will determine long-term resilience in a more competitive global market.

LNG’s Zacks Rank & Key Picks

Houston, TX-based Cheniere is primarily engaged in businesses related to liquefied natural gas. Currently, LNG has a Zacks Rank #3 (Hold).

Investors interested in the energy sector may consider some top-ranked stocks like Canadian Natural Resources Limited CNQ, Oceaneering International, Inc. OII and USA Compression Partners, LP USAC, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Calgary-based Canadian Natural is one of the largest independent energy companies in Canada engaged in the exploration, development and production of oil and natural gas. The Zacks Consensus Estimate for CNQ’s 2025 revenues indicates 5.7% year-over-year growth.

Oceaneering International is one of the leading suppliers of offshore equipment and technology solutions to the energy industry. The Zacks Consensus Estimate for OII’s 2025 earnings indicates 76.3% year-over-year growth.

USA Compression is one of the largest independent natural gas compression service providers across the United States in terms of fleet horsepower. The Zacks Consensus Estimate for USAC’s 2025 earnings indicates 29.8% year-over-year growth.

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This article originally published on Zacks Investment Research (zacks.com).

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