The global market for liquefied natural gas faces supply uncertainty from factors including sanctions on Russian fuel, aging plants and attacks on vessels in the Red Sea, according to the International Gas Union.  

US sanctions on Russia’s new Arctic LNG-2 project have caused all foreign shareholders to suspend their participation, and “even currently operational projects may have issues producing spare parts of maintenance,” the industry group said in its latest World LNG Report published Wednesday.

Production bottlenecks at shipyards, and a US pause on new LNG-export licenses are also contributing to market concerns, it added.

Natural gas has become an increasingly global commodity in recent years, with Europe leaning heavily on LNG to help fill the gap after Russia cut most pipeline supplies to the region. At the same time, Asian demand for the liquefied fuel has surged. That reliance has left the market more susceptible to supply disruptions. 

Meanwhile, a wave of new plants under construction in the US and Qatar — the world’s top suppliers — won’t be online for a few years. Last week, the European Union banned transshipments of Russian LNG cargoes at the bloc’s ports, adding to the complexities of trading the fuel.

Over the long term, the Biden administration’s licensing pause for new projects could delay more than 70 million tons of LNG per year of new US capacity, the IGU said in its report, though global balances remain unaffected for the time being.

However, more than 120 million tons per year of operational capacity — about a quarter of the world total — is more than 20 years old, according to the study. That means issues at aging plants could become more frequent. 

Multiple facilities “are operating at low utilization rates, and more could be headed for shut-ins” due to issues including field declines, it said. “Younger facilities also face this risk if upstream production declines faster than expected, such as in Egypt.”