Slower than expected gas demand in China could put more pressure on LNG suppliers that are already trying to survive high costs amid an industrywide downturn marked by lower crude prices.

This comes as 2015 is expected to bring growth in LNG supplies, according to a report released this week by the Wood Mackenzie consultancy that highlighted certain areas to watch in the coming year.

“From 2015, LNG markets face rapid supply growth, led by Australia and followed into 2016 by the U.S., from the Gulf Coast,” Noel Tomnay, head of global gas and LNG for Wood Mackenzie, said in the report. “Suppliers will be looking closely at Asia’s gas demand growth.”

This raises some concerns considering gas demand in China—the world’s most populous country—grew slower than anticipated this year. The report stated that China’s natural gas demand was expected to increase 17% over the 2013 level; however, demand grew less than 10% year-on-year.

The U.S. Energy Information Administration projects gas demand in China, which is ranked as the third-largest LNG importer, will rise to 221 Bcm (7.8 Tcf) in 2020 before skyrocketing to about 481 Bcm (17 Tcf) by 2040.

In addition to efforts to tap its own gas resources, the country has turned to Russia—among others—to help meet its gas needs. In November, China and Russia sealed a $400 billion gas deal. As part of the agreement, Gazprom will supply 30 Bcm (1 Tcf) of gas annually from Western Siberia. The agreement followed one signed in May when Gazprom and China National Petroleum Corp. signed a 30-year contract for 38 Bcm (1.3 Tcf) of gas annually.

China also is depending on LNG imports, and many of the LNG suppliers in Australia are hoping to help meet this need here and elsewhere. Drawing from gas fields offshore Western Australia, Northern Territory and Queensland, Australia has more than $200 billion worth of LNG projects under construction, according to the Australian Petroleum Production & Exploration Association.

First LNG is expected by year-end 2014 for the Queensland Curtis LNG project, being developed by BG Group and CNOOC. Plans for the project’s first phase call for two LNG trains with 8.5 million tonnes per annum (mtpa) of LNG.

Three other LNG projects are scheduled for startup in 2015. Chevron’s Gorgon project is about 87% complete, according to Chevron Australia’s website. Project partners are ExxonMobil, Shell, Osaka Gas, Tokyo Gas and Chubu Electric Power.

“Seven of the ten wells at the Jansz-lo field and seven of the eight wells at the Gorgon field are ready to produce,” Chevron said. “The Jansz-lo field is now connected to the LNG plant following the final tie-in welds between the offshore and cross-island pipeline systems. The Gorgon pipeline system is being prepared for a similar tie-in.”

The Australia Pacific coalseam gas to LNG project—a joint venture partnership between Origin, ConocoPhillips and Sinopec—is due online next year with a capacity of 9 mtpa. The Santos-operated Gladstone LNG project, another Queensland project, also anticipates its first LNG cargo in 2015. Working with Petronas, Total and KOGAS, Gladstone will be capable of producing 7.8 mtpa of LNG.

“With so many projects and trains, it is inevitable that new supply availability will be lumpy at times,” the report said. “This, in combination with China’s growing pains on the demand side, and the background of a relatively low oil price environment, will likely place downward pressure on Asian LNG spot prices at times, with implications for the global gas market.”

Additional LNG projects are under construction in Australia with targeted start dates in 2016 and 2017.

Experts have said Australia could become the world’s largest LNG exporter, with supplies going to not only China but also Japan, Korea, Taiwan and India. But demand will play a critical role.

Already, “there are now real concerns that the Chinese market will struggle to absorb all of its contracted LNG, which doubles to 35 mmtpa (million metric tonnes per annum) over the next three years,” said the report authored by Paul McConnell, principal analyst of global markets for Wood Mackenzie.

After pointing out some of the factors that led to the lower than predicted gas demand—slower economic growth, a reluctance to implement environmental policies facing gas—he said in the report that some Chinese LNG buyers are remarketing some of this volume outside China.

“LNG suppliers are wondering how long these growing pains will last,” the report said. “In 2015, the Chinese government may decide to lower gas prices, given lower oil prices. If it does not, gas supplier margins will be protected, but at the expense of demand growth. LNG suppliers will be hoping for some cold weather in 2015.”

Contact the author, Velda Addison, at vaddison@hartenergy.com.