Global demand for liquefied natural gas (LNG) is expected to rise by 60% by 2040, driven largely by economic growth in Asia, according to Shell’s annual LNG report released on Tuesday.
The UK-based oil giant also highlighted several other factors contributing to this growth, including efforts to reduce emissions in heavy industry and transport, and the rising demand for electricity driven by artificial intelligence (AI).
Last year, global LNG trade grew by just 2%, marking the slowest annual increase in a decade. This was primarily due to a lack of major new LNG supply, with global trade reaching 407 million tons in 2024, Shell reported.
However, over the next few years, more than 170 million tons of new LNG supply is expected to come online, mostly from the U.S. and Qatar. This increase in supply is anticipated to help meet growing demand, particularly in Asia. Despite this, the timing for the start-up of many new LNG projects remains uncertain, according to Shell’s LNG Outlook for 2025.
European LNG imports fell by 23 million tons, or 19%, in 2024 compared to 2023. This decrease was attributed to strong renewable energy generation and weak industrial gas demand, Shell estimated.
Looking ahead, Shell expects Asia to drive much of the LNG demand surge. The growth of gas connections in China and India is expected to significantly boost gas consumption in these countries and globally.
With LNG demand set to increase by 60% over the next 15 years, Shell emphasized the need for more investment to ensure supply can keep pace with this growing demand.
“Updated forecasts show that the world will need more gas for power generation, heating, cooling, industry, and transport to meet both development and decarbonization goals,” said Tom Summers, Senior Vice President for Shell LNG Marketing and Trading.
Earlier this month, Shell also forecasted that global LNG demand would continue to rise through 2030 across all three scenarios in its new energy security report.
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