Shell forecasts LNG demand to rise by 60 percent by 2040, driven by Asia

Global demand for liquefied natural gas (LNG) is expected to rise by around 60 percent by 2040, driven mainly by economic growth in Asian countries. British energy company Shell said this today in its annual outlook. The United States and Qatar are expected to be the largest LNG suppliers through 2035.

Demand for LNG will come mainly from India and China. Further expansion of the relevant infrastructure is also expected in these countries. Shell says that increased use of artificial intelligence (AI) and efforts to limit harmful emissions in heavy industry and transport will also have an impact.

Global demand for natural gas continues to rise as the world transitions to more environmentally friendly fuels. The industry expects LNG demand to continue increasing, reaching between 630 and 718 million tonnes a year in 2040, Shell says in this year’s outlook.

Shell is the world’s largest LNG trader. Its latest outlook projects higher demand for liquefied natural gas than last year’s outlook did. The company then forecast that LNG demand would rise to between 625 and 685 million tonnes a year by 2040.

„Updated forecasts show that the world will need more gas for power generation, heating and cooling, industry and transport to meet its goals for further development and decarbonisation,“ says Tom Summers, Shell’s vice president for LNG marketing and trading.

China remains the world’s largest LNG importer. Together with India, it is increasing LNG import capacity and expanding gas transportation infrastructure. Both countries are seeking to meet rising demand.

China’s natural gas imports are expected to increase this year as plans to support economic activity boost industrial demand. However, trade tensions with the United States could slow growth, Reuters noted. China imported 131.69 million tonnes of natural gas last year, including pipeline deliveries. This was the highest figure since 2013. According to customs data, LNG accounted for 76.65 million tonnes of that total.

For India, the International Energy Agency (IEA) expects natural gas consumption to increase by 60 percent between 2023 and 2030. This will double India’s need for LNG imports, as domestic production is forecast to grow much more slowly than demand.

While a young population and economic growth are driving higher gas demand in emerging markets such as Algeria, Egypt, Malaysia and Indonesia, domestic production in these markets is expected to fall by as much as 50 million tonnes over the next 15 years. This means less gas will be available for export, Shell says in its outlook.

More than 170 million tonnes of new LNG supply is expected to be available by 2030 to meet rising demand, particularly in Asia. However, the timeline for the start-up of new LNG projects remains uncertain, Shell warns. Several LNG projects have been delayed over the past two years due to geopolitical tensions, regulatory hurdles, labour shortages and supply chain bottlenecks, pushing the availability of around 30 million tonnes of new LNG supply back to 2028. By comparison – this volume is equivalent to India’s LNG imports.

Last year, global LNG trade grew by just two million tonnes to 407 million tonnes, mainly because of difficulties ramping up new supply. This was the smallest annual increase in a decade. Expected supply last year ranged from seven to 20 million tonnes, falling short of even the lower end of the projected range.

Demand for LNG in Europe is expected to increase this year and in the years ahead. „Europe will need LNG beyond 2030 to balance the growing share of intermittent renewable energy in its energy sector. In the longer term, existing natural gas infrastructure could be used to import bio-LNG or synthetic LNG and could also be adapted to import green hydrogen,“ Shell says.

A significant increase in LNG supply is expected from the United States, the world’s largest exporter. By 2030, it could potentially reach 180 million tonnes a year and account for about a third of global supply. Analysts expect that, together with the expansion of Qatar’s giant North Field project, where production is due to start ramping up in 2026, the United States and Qatar could supply around 60 percent of global LNG by 2035.