Shell: Global LNG demand expected to grow by more than half by 2040

Global demand for liquefied natural gas (LNG) is expected to increase by more than half by 2040. Energy company Shell said so in its annual report on the LNG market. The increase in demand is expected to be driven by rising gas consumption in China and other Asian countries.

Shell noted that although demand for natural gas has already peaked in some regions, such as Europe, Japan and Australia, it continues to grow globally.

Global LNG trade rose by 1.8 percent to 404 million tonnes last year, according to the report, and the latest estimates suggest that LNG demand will reach 625 to 685 million tonnes in 2040.

„China is likely to dominate LNG demand growth this decade, as its industry seeks to reduce carbon emissions by switching from coal to gas,“ Shell said.

„China’s coal-based steel sector generates more emissions than Britain, Germany and Turkey combined. Gas therefore plays a vital role in tackling one of the world’s largest sources of carbon emissions,“ it added.

LNG imports helped Europe offset the decline in gas supplies from Russia resulting from Russia’s invasion of Ukraine. „LNG continued to play an indispensable role in European energy security last year after Russian pipeline exports to Europe plunged in 2022,“ Shell said. It added that LNG imports to Europe last year remained roughly at 2022 levels, despite a decline in overall European demand for natural gas.

Shell also said that relatively mild winter temperatures, high storage levels and a slow economic recovery in China helped maintain balance in the global gas market last year. According to the company, this helped „reduce and stabilize“ gas prices in Europe.