A carrier ship docked at LNG Canada's export facility in Kitimat, B.C., on Aug. 19.Jesse Winter/Reuters
A wave of liquefied natural gas development is set to double global supplies by the end of the decade, with around 300 billion cubic metres of new annual export capacity scheduled to come online, according to a new analysis from the International Energy Agency.
That’s the largest ever global addition to LNG capacity, some of which will come from Canada.
The new LNG Canada terminal in Kitimat, B.C., only began exporting the fuel in June. But the country’s trajectory for natural gas production – set to rise by roughly 35 billion cubic metres (bcm) to 250 bcm by 2035 – puts it on course to cement its “entrance to the club of LNG exporters,” said the IEA’s World Energy Outlook 2025, released Thursday.
Natural gas has been a focus for the federal government as part of Prime Minister Mark Carney’s bid to make Canada an energy superpower. Expansion of the LNG Canada facility was on the first list of projects that will be reviewed for fast-track approval under Ottawa’s Building Canada Act; on Monday, Finance Minister François-Philippe Champagne called the project a “game changer.”
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In its 2025 report, the Paris-based IEA outlined outcomes under three scenarios: current policies, stated policies and policies put in place to bring emissions to net-zero by 2050.
Under current government policies, the new supply of LNG will be absorbed “relatively quickly by robust increases in demand,” the report said. Similarly, under stated policies, a well-supplied global gas market remains into the 2030s.
In the net-zero scenario, however, global demand and prices are much lower. Both will remain significantly below 2024 levels by 2035 as the rapid expansion of renewables and electrification limits gas demand growth, despite abundant availability of the fossil fuel.
Common among all scenarios, however, is that the world will have ample supplies of oil and gas in the near term, owing to a “quintet of producers in the Americas – the United States, Canada, Guyana, Brazil and Argentina – and muted demand growth,” the report said.
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The world’s growing need for energy, particularly for emerging economies in India and Southeast Asia, is also set to continue under all scenarios.
Countries in those regions will increasingly shape energy market dynamics in the years ahead, the report said. They are set to take the baton from China, which has accounted for half of global oil and gas demand growth and 60 per cent of electricity demand growth since 2010.
But the surging demand for energy of all kinds comes amid an uncertain geopolitical landscape, which could place the security of supplies in a precarious spot.
“When we look at the history of the energy world in recent decades, there is no other time when energy security tensions have applied to so many fuels and technologies at once,” IEA executive director Fatih Birol said in a statement.
With energy security front and centre for many governments, he said, responses need to consider affordability, access, competitiveness and climate change in a data-driven way.
That’s particularly true for electricity.
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The annual report has for years flagged increasing global demand for electricity, but in 2025, it said that demand has reached “breakneck growth” owing to surging investment in data centres – a sector expected to reach US$580-billion in 2025.
“In a break from the trend of the past decade, the increase in electricity consumption is no longer limited to emerging and developing economies,” Dr. Birol said.
“Those who say that ‘data is the new oil’ will note that this surpasses the US$540-billion being spent on global oil supply – a striking example of the changing nature of modern economies.”
Yet the world continues to fall short on action to avoid the worst effects of climate change, the analysis found; even with rapid action to reduce emissions, the planet is set to surpass 1.5 degrees of warming, failing the target laid out in the Paris Agreement.
On a more hopeful note, the report said there is still scope to avoid the worst climate outcomes, if the world reaches net-zero emissions by mid-century. Doing so would bring temperatures back below 1.5 degrees in the long term, it said.