Natural Gas & LNG

Unlike crude oil, natural gas is expensive to move, so it prices regionally rather than globally. North America trades off Henry Hub, Europe off the Dutch TTF, and Asian LNG off the Japan-Korea Marker (JKM). LNG shipping links these pools, but only imperfectly — which means the spreads between them, not any single price, are what govern cargo economics and hedging strategy.

How the market works

Unlike oil, natural gas has no single global price. Pipeline gas is priced at regional hubs — Henry Hub (US) and TTF (Europe) — while seaborne LNG links those regions to Asia via the JKM benchmark. Liquefied natural gas is chilled to a liquid, shipped, and re-gasified, so LNG turns a set of regional markets into one increasingly connected system: European and Asian benchmarks now move almost in lockstep. Gas is heavily seasonal (heating and cooling demand), and storage plus the summer-to-winter spread are central to how the market clears. Producers, utilities and traders hedge on ICE (TTF), CME/NYMEX (Henry Hub) and JKM derivatives.

Major trade flows

LNG trade is dominated by three exporters — the United States, Qatar and Australia, which together supply around 60% of global LNG; the US became the largest exporter and is expected to provide roughly a third of supply by 2030. Demand is led by Asia (China is the largest importer, with India and other emerging buyers growing), while Europe pivoted hard to LNG after 2022 to replace Russian pipeline gas. Shell’s outlook sees global LNG demand rising around 65% by 2050 — a structurally growing, flexible market whose price spreads continually redirect cargoes between the Atlantic and Pacific basins.