London/Singapore — Global demand for liquefied natural gas (LNG) is estimated to rise by about 60% by 2040, driven largely by economic growth in Asia, AI spin-offs and efforts to cut emissions in heavy industries and transportation, Shell said in an annual report on Tuesday.
Demand for natural gas continues to rise globally as the world transitions to cleaner fuels. Industry forecasts LNG demand to reach 630-million to 718-million tonnes a year by 2040, Shell said in its 2025 annual LNG outlook.
The latest view from the world's largest LNG trader is higher than last year’s forecast, which pegged global LNG demand in 2040 at 625-million to 685-million tonnes a year.
“Upgraded forecasts show that the world will need more gas for power generation, heating and cooling, industry and transport to meet development and decarbonisation goals,” said Tom Summers, Shells senior vice-president for LNG marketing and trading.
China, the world’s top LNG importer, and India are increasing LNG import capacity and gas related infrastructure to meet rising demand, Shell added.
Natural gas imports into China are forecast to rise this year as economic stimulus plans lift industrial demand, though trade tensions with the US may cap growth.
In India, the International Energy Agency expects natural gas consumption to jump 60% between 2023 and 2030, doubling the country's need for LNG imports, as domestic output is expected to grow much more slowly than demand.
To meet rising demand, particularly in Asia, more than 170-million tonnes of new LNG supply is set to be available by 2030, said Shell. The start-up timings of new LNG projects, however, are uncertain.
Growth in LNG supply will come from top exporter the US, potentially reaching 180-million tonnes a year by 2030 and accounting for a third of global supply, the report said.
In 2024, global LNG trading rose by only 2-million tonnes to 407-million tonnes due to constraints on development of new supply, marking the smallest annual increase in the past decade, the report said.
While Asian LNG demand strengthened in the first half of last year with lower prices and hotter weather spurring power generation needs, Europe’s imports fell in the first three quarters of 2024 before demand picked up as cold weather led to faster depletion of storage inventories.
Europe’s LNG demand is expected to grow in 2025 and beyond.
“Europe will continue to need LNG into the 2030s to balance the growing share of intermittent renewables in its power sector. In the longer term, existing natural gas infrastructure could be used to import bio-LNG or synthetic LNG and be repurposed for the import of green hydrogen,” Shell’s report said.
Reuters
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