Rising Asia Temperatures Bode Well for US LNG Export Prospects

Forecasts for above-average temperatures in key Asian markets through August 2025 are expected to increase demand for U.S. liquefied natural gas (LNG) exports, which have already reached record highs this year. Higher temperatures in Japan, South Korea, and China will likely drive greater use of air conditioners, increasing electricity demand and prompting utilities to rely more on natural gas-fired power plants, primarily fueled by imported LNG.

An LNG tanker is guided by tug boats at the Cheniere Sabine Pass LNG export unit in Cameron Parish, Louisiana, U.S., April 14, 2022.

In East Asia, temperatures are already exceeding long-term averages and are projected to remain elevated for the next two months. In Japan, the world’s second-largest LNG importer after China in 2024, average temperatures are anticipated to be about 6% above normal through August, according to LSEG data. Similar trends are expected in South Korea, Taiwan, Hong Kong, and several Chinese cities. The combination of heat and high humidity during Asia’s rainy season will likely intensify air conditioning use, straining power grids and boosting electricity demand.

Asia’s power producers typically adjust to summer demand spikes. In 2024, electricity consumption in June, July, and August was approximately 9% higher than the annual monthly average. To meet this, utilities increased output from fossil fuel plants, with gas- and coal-fired generation rising about 5% above the yearly average, per Ember data. To support this summer’s expected demand, Asian LNG importers are likely to secure higher LNG volumes in May, June, and July. Kpler data shows U.S. LNG exports to Asia during these months from 2021 to 2024 averaged 7.8 million metric tons monthly, compared to 2.23 million tons monthly across all months in that period.

LNG prices will influence Asian demand, as natural gas competes with coal for power generation. In 2025, U.S. LNG export prices have averaged $8.54 per thousand cubic feet, a 35% increase from 2024, per LSEG. However, a potential decline in European LNG purchases this summer could ease prices. Europe accounted for 70% of U.S. LNG exports in the first half of 2025, with monthly shipments averaging 6 million tons, compared to 1.6 million tons to Asia, according to Kpler. Europe’s gas storage, currently at 50% capacity compared to 70% in 2023 and 2024, will determine its LNG needs. If storage operators delay restocking, European demand may drop, potentially lowering prices and attracting Asian buyers.

A utility executive in Japan noted: “We are preparing for increased LNG imports to meet summer demand reliably.” This suggests U.S. LNG exports will remain strong, supported by Asian demand if European orders decrease, ensuring robust export volumes in the near term.