Assessing the Long-Term Viability of U.S. LNG Exports Amid China-Russia Energy Alliances

The global liquefied natural gas (LNG) market is at a crossroads, with U.S. exporters facing both headwinds and tailwinds as China and Russia deepen their energy partnership. For investors, the key question is whether the U.S. can maintain its dominance in LNG exports—or if the growing Sino-Russian energy alliance will erode its market share.

China-Russia Alliances and Market Shifts

China and Russia have made significant strides in solidifying their energy relationship. The Power of Siberia 2 (PoS-2) pipeline, a legally binding agreement between Gazprom and CNPC, is poised to deliver up to 50 billion cubic meters (bcm) of Russian gas annually to China by 2030. Combined with the existing Power of Siberia 1 pipeline, which already transports 38 bcm per year, this infrastructure will redirect over 100 bcm of Russian gas eastward—equivalent to the volume once supplied to Europe via Nord Stream 2.

This shift has profound implications. By 2030, Russian pipeline gas could displace roughly one-third of China's current LNG demand, reducing reliance on suppliers like Australia, Qatar, and the U.S.. For context, U.S. LNG currently accounts for about 5% of China's LNG imports, but this share could shrink as Russia gains a stronger foothold.

U.S. LNG Projections and Competitive Landscape

Despite these challenges, the U.S. LNG sector is not without momentum. Export volumes are projected to rise by 36% from 2024 to 2026, reaching 16 billion cubic feet per day (Bcf/d) in 2026, driven by new facilities like Plaquemines LNG Phase 1 and Corpus Christi Stage 3. However, the U.S. faces a critical headwind: European demand is expected to grow by only 0.1% in 2025, while Asian markets—China's primary alternative—are projected to expand by at least 1%.

This dynamic is already reshaping U.S. export destinations. While Europe has historically received 64% of U.S. LNG, the sector is pivoting toward Asia, where LNG Canada's first shipment in 2025—backed by Asian investors—signals a strategic realignment. Yet, even as U.S. exporters chase Asian demand, they must contend with the looming shadow of PoS-2.

Strategic Risks and Opportunities

Risks:
1. Market Displacement: The PoS-2 pipeline could reduce China's LNG imports by 15–20% by 2030, directly threatening U.S. export volumes. This displacement is compounded by China's growing domestic gas production, which contributed 59% of its total consumption in 2022.
2. Price Competitiveness: Russian pipeline gas is often priced lower than U.S. LNG, which relies on volatile global markets. If China locks in long-term pricing for PoS-2, U.S. exporters may struggle to compete.
3. Geopolitical Uncertainty: While the Sino-Russian alliance appears robust, shifts in China's energy transition priorities—such as increased renewables adoption—could temper demand for both LNG and pipeline gas.

Opportunities:
1. Diversification of Markets: U.S. LNG's flexibility allows it to pivot to other Asian markets, such as India and Southeast Asia, where demand is growing. By 2030, these regions could absorb a significant portion of U.S. exports.
2. Technological Edge: U.S. LNG facilities are among the most efficient globally, with low production costs and rapid ramp-up capabilities. This agility could offset some of the pricing disadvantages posed by Russian pipeline gas.
3. Strategic Alliances: Partnerships with countries like Japan and South Korea, which prioritize energy security, could create long-term contracts that insulate U.S. exporters from short-term price swings.

Conclusion

The U.S. LNG sector remains a formidable player, but its long-term viability hinges on navigating the dual pressures of Sino-Russian integration and shifting global demand. While PoS-2 threatens to erode U.S. market share in China, the sector's flexibility, technological advantages, and access to emerging Asian markets offer a path forward. For investors, the key is to balance exposure to U.S. LNG with hedging strategies that account for geopolitical and pricing risks. The next five years will be pivotal—those who adapt to the new energy landscape will thrive, while those who cling to the status quo may find themselves left behind.

Source:
[1] How a Russia-China Gas Pipeline — Power of Siberia 2 [https://www.bloomberg.com/news/articles/2025-09-09/how-a-russia-china-gas-pipeline-power-of-siberia-2-threatens-us-lng-exports]
[2] China-Russia Gas Pipeline to Reshape Global LNG Markets [https://discoveryalert.com.au/news/china-russia-gas-pipeline-2025-global-energy-impact/]
[3] Inside China's 2023 Natural Gas Development Report [https://www.energypolicy.columbia.edu/inside-chinas-2023-natural-gas-development-report/]
[4] Russia-China Gas Pipeline Alliance Reshapes Global ... [https://discoveryalert.com.au/news/power-of-siberia-2-russia-china-energy-pipeline-2025/]
[5] China leads the growth in projected global natural gas [https://www.eia.gov/todayinenergy/detail.php?id=33472]
[6] Power of Siberia 2: Russia's Pivot, China's Leverage, and Global Gas Implications [https://www.energypolicy.columbia.edu/power-of-siberia-2-russias-pivot-chinas-leverage-and-global-gas-implications/]