Shell’s LNG Outlook 2025 predicts a significant increase in global liquefied natural gas (LNG) demand, projecting a rise of around 60 per cent by 2040.
This growth is primarily attributed to economic expansion in Asia, efforts to reduce emissions in heavy industry and transport, and the increasing impact of artificial intelligence.
Industry forecasts now anticipate LNG demand to reach between 630 and 718 million tonnes annually by 2040, an upward revision from previous projections.
Despite this optimistic long-term outlook, global LNG trade experienced its slowest growth in a decade during 2024, increasing by only two million tonnes to reach 407 million tonnes.
Tom Summers, Senior Vice President for Shell LNG Marketing and Trading, emphasised the crucial role of LNG in meeting future energy needs.
“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,” Summers stated.
China and India are poised to drive significant demand growth in the Asian market.
China is expanding its LNG import capacity and plans to connect 150 million people to piped gas by 2030.
Similarly, India is developing its natural gas infrastructure, aiming to provide gas connections to 30 million people over the next five years.
The marine sector is expected to contribute substantially to LNG demand growth, with forecasts indicating a 60 per cent increase to over 16 million tonnes annually by 2030.
This growth is driven by an expanding fleet of LNG-powered vessels and the fuel’s potential to reduce emissions in shipping and road transport.
On the supply side, Qatar and the United States are projected to lead significant growth.
The US is poised to solidify its position as the world’s largest LNG exporter, potentially reaching 180 million tonnes annually by 2030, accounting for a third of global supply.
Europe’s LNG demand is expected to persist into the 2030s, balancing the growing share of intermittent renewables and ensuring energy security.
In 2024, while European LNG imports decreased by 19 per cent due to strong renewable energy generation, the continent is anticipated to increase LNG imports in 2025 to replenish gas storage.
The LNG market experienced volatility in 2024, with prices recovering mid-year after initial lows.
Asian demand strengthened, particularly in China and India, while Europe faced challenges towards the year’s end due to weather conditions and the expiration of Russian pipeline gas flows through Ukraine.
As the global energy landscape continues to evolve, LNG’s role in meeting growing energy demand while supporting decarbonisation efforts remains crucial.
The industry’s ability to adapt to changing market dynamics and environmental goals will be key to realising the projected growth in the coming decades.
