Arab countries post modest LNG export growth in Q1 2025
The report on LNG and Hydrogen Developments for Q1 2025, prepared by OAPEC's Gas Industry Expert Wael Abdel Moati, noted that Egypt halting LNG exports to serve its domestic market and Algeria's maintenance operations at the liquefaction units in Arzew and Skikda led to the decline in export volumes, which was offset by higher exports from Qatar, the UAE, and Oman during this period.
Exports from Arab countries are expected to rise in the future following Mauritania's entry into the group of Arab LNG-exporting countries after the launch of the Greater Tortue Ahmeyim project, according to OAPEC.
The organisation expects a 3.3 percent growth in LNG supply during 2025. Globally, 11 LNG Sales and Purchase agreements have been signed for the export of 16 million tonnes per year (mtpa) during the first quarter of 2025.
Supply forecasts
Global LNG liquefaction capacity is expected to rise by 27 mtpa to about 515.6 mtpa by the end of 2025 driven by the commissioning of two new projects in the United States, one in Canada and one in Mauritania.
However, due to the technical nature of the commissioning tests, which may involve malfunctions or delays, and the staggered timelines for the four projects to enter actual production, the actual LNG supply is expected to be lower than the added design capacity.
Moreover, recent U.S. sanctions targeting medium-scale liquefaction plants in Russia and the scheduled maintenance at several existing facilities in the coming months, are also expected to impact the volume of actual LNG supplies.
According to the updated estimates from OAPEC, global LNG supplies are projected to increase by about 3.3 percent in 2025 to 425 million tonnes compared to 2024.
This increase would help meet part of the rising European demand, particularly considering the halted Russian gas flows via Ukraine, which are estimated at around 15 billion cubic metres per year, equivalent to about 11 mtpa of LNG.
Despite the expected supply increase, global demand is expected to absorb it, keeping LNG prices at elevated levels during 2025 compared to the previous year, driven by geopolitical factors and intensifying competition between the European and Asian markets for LNG, the report noted.
Hydrogen developments
Arab nations are targeting 8 mtpa of low carbon hydrogen production by 2030 and 27 mtpa by 2040, according to the OAPEC hydrogen tracker.
At the end of March 2025, 130 projects for hydrogen production had been announced. Eight Arab nations have national hydrogen strategies in place while 65 countries have announced globally.
'This rapid development in policy formulation reflects a growing commitment by Arab countries to establish the legislative and regulatory frameworks necessary to enter the global hydrogen market. It also indicates a clear recognition of the importance of early preparation to seize investment and trade opportunities in this promising sector', the report noted.
The report stressed that the region has the potential to become a key player in the global hydrogen market in the coming decades but will require several years of effort and coordination to establish a mature and stable global market.
Achieving the ambitious goals set by Arab countries is contingent on:
a) The creation of global demand for low carbon hydrogen
b) A significant reduction in production costs driven by technological advances,
c) The development of large-scale integrated infrastructure that includes transport, storage and distribution systems.
Strengthening regional and international cooperation in areas such as technology transfer and knowledge sharing will be a pivotal factor in accelerating progress and reducing investment risks in this emerging sector, the report concluded.
(Writing by Sowmya Sundar; Editing by Anoop Menon)
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