Over the last few decades, we have seen the proliferation of a number of different energy sources. In the midst of this ongoing change, the proportional contribution of fossil fuels to energy production has been in decline. Despite this, and despite a recent decline in the use of coal and a much longer decline for oil, contributions of natural gas (NG) show no sign of decreasing. In fact, between 2000-2019, its share of global energy generation rose over 5.5% in stark contrast to fellow hydrocarbons.[1]
Historically, this has been driven by several factors, including better environmental characteristics than oil and coal, more efficient conversion into energy, and greater flexibility in terms of output volume adjustments and storage potential.[2] A combination of the factors above and more has created a new tailwind for gas consumption as hyperscalers building out AI data centres turn to standalone gas turbines as the favoured approach to power generation, in one of the most energy-hungry industries in the world.[3]
We can start to see how vital NG is to global energy supplies. In the United States, home to nearly half of the world’s data centres, over 40% of data centre energy is provided by NG, with this figure predicted to increase.[4] On a more global scale, NG contributed to 23% of the global energy supply in 2023, and under current policy scenarios, the IEA see this as likely to continue upwards as far out as 2050.[5]
Source: International Energy Agency. Data as of 04.04.2025. Chart shows expected data. For illustrative purposes only.
Over the last few years, NG has progressed on its path to dominance to a backdrop of significant supply headwinds. Broad disagreement with Russia’s activity in Europe has led to the gradual separation of Ukrainian allies from Russian energy supply, ultimately seeing European gas imports from Russia declining from 45% to 12% of gas provision since 2022.[6]
The middle east conflict itself has introduced well-publicised limits to energy markets. Qatar export 20% of global LNG supplies, and strikes carried out on the country’s Ras Laffan facilities led to a complete suspension of LNG processing. Even after the processing pause, roughly 17% of the supplier’s export capacity is offline, and a period of 3-5 years will likely be required to bring this back online.[7]
The issues listed above have introduced unpredictability and unreliability to the global LNG market. While damaged facilities can be brought back online, there is now an awareness that diversified supply is required to insulate against the kinds of interruptions that we have seen here.
China is the world’s most significant importer of LNG and have historically received around 30% of its import volumes from Qatar. India sits fourth in the list of global LNG importers, processing an even greater 41% of their LNG import volumes through Qatar. A total of 83% of LNG volumes passing through the Strait of Hormuz are destined for Asia.[8] All these individual stories come together to underline a core message; overreliance on single sources of fuel introduces unacceptable levels of geopolitical risk.
Research and analysis provider Carbon Analytics summed up the situation with the following;
“This conflict highlights that oil and gas supply chains are inherently unreliable and vulnerable to geopolitical instability. Of all commodities, LNG is the most exposed to geopolitical shocks, with conflicts magnifying inherent volatility.”[9]
As the countries listed above and many more seek an alternative source of NG, the US and Canada have been gearing up to take on an environment of increased demand. The structurally higher price environment of the last 4 months has driven producers to increase their base output.
What’s more, processors in the US have been in an ongoing state of expansion as they look to intercept the wave of demand coming from data centre proliferation. This domestic expansion has left the US with a sturdy and reliable network on which to increase its exports. The golden pass LNG terminal was completed and opened earlier in 2026, with nominal processing capacity at 2bn cubic feet per day.[10] Full approval for the commencement of exports from this terminal arrived in June 2026, and this will contribute to the predicted doubling in US LNG exports through to 2031.[11] Canada also has its part to play in this story. As one of many examples, Enbridge (an LNG focused Canadian pipeline and energy company) currently have a secured project backlog totalling $40bn.
We can see above tangible examples of North America’s efforts to establish itself as the dominant force in global NG markets, and the need for vast expansion of transport and processing capabilities should stand to provide extensive benefits to the companies running the infrastructure that facilitates this vision of growth.
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[1] https://www.iea.org/reports/world-energy-balances-overview/world
[2] https://illuminem.com/illuminemvoices/examining-the-pros-and-cons-of-natural-gas
[3] https://www.globalelectricity.org/data-centers-energy-consumption/
[4] https://www.iea.org/reports/energy-and-ai/energy-supply-for-ai
[5] https://www.iea.org/world/natural-gas
[6] https://energy.ec.europa.eu/strategy/repowereu-phase-out-russian-energy-imports_en
[7] https://www.spglobal.com/energy/en/news-research/latest-news/electric-power/031926-qatarenergy-expects-3-5-years-to-repair-lng-facilities-after-strikes
[8] https://www.energyconnects.com/opinion/features/2026/june/the-market-outlook-for-gas-and-lng-in-asia/
[9] https://zerocarbon-analytics.org/insights/briefings/asian-countries-most-at-risk-from-oil-and-gas-supply-disruptions-in-strait-of-hormuz/
[10] https://www.eia.gov/todayinenergy/detail.php?id=67564
[11] Ibid
This material does not constitute a marketing document. It is not an invitation to invest but to be read for educational purposes only. Past performance and forecasts are not reliable indicators of future results.
Natural gas is playing an increasingly important role in the global energy mix because it is a flexible, reliable and relatively lower-emission fossil fuel compared with coal and oil. Demand is also being supported by the rapid expansion of AI data centres, which require large amounts of dependable electricity. The International Energy Agency expects natural gas to remain a significant part of global energy supply for decades under current policy scenarios.
AI data centres consume enormous amounts of electricity to power high-performance computing infrastructure. In the United States, many new data centres are expected to rely on natural gas-fired power generation because it can provide continuous, dispatchable power. Furthermore, as hyperscalers continue to expand their data centre footprint they are increasingly looking to internalise this expansion by building their own data centre and power generation facilities, for which gas turbines provide an effective solution. As AI infrastructure expands, natural gas demand is expected to grow alongside it.
Global LNG supply chains have become more vulnerable due to geopolitical events and regional conflicts. Reduced Russian gas exports to Europe, disruptions to LNG processing in the Middle East, and shipping risks through key trade routes have highlighted the importance of diversified and resilient energy supplies. These disruptions have increased concerns around energy security and supply reliability.
Relying heavily on a single supplier can expose countries to geopolitical risks, supply disruptions and price volatility. Diversifying natural gas imports across multiple regions helps improve energy security, reduces dependence on individual exporters and creates a more resilient supply chain during periods of geopolitical uncertainty or market disruption.
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