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Global LNG demand is set to surge by 60% through 2040, pushed up by Asia’s economic growth, the world’s biggest LNG trader, Shell, said in its annual LNG report on Tuesday.
The other key drivers of LNG consumption growth will be the push for emissions reductions in heavy industry and transport, as well as the impact of artificial intelligence (AI) on power demand, according to the UK-based supermajor.
Last year, a lack of major new LNG supply led to only a 2% increase in global LNG trade, the lowest annual rise in 10 years. In 2024, LNG trade hit 407 million tons due to constrained new supply development, according to Shell.
In the next few years to 2030, more than 170 million tons of new LNG supply are expected to come onstream, mostly from the U.S. and Qatar, helping to meet stronger gas demand, especially in Asia. However, the start-up timings of many new LNG projects are uncertain, according to the Shell LNG Outlook 2025.
European LNG imports fell by 23 million tons, or 19%, in 2024 versus 2023, due to strong renewable energy generation and continued weakness in industrial gas demand, Shell has estimated.
Going forward, it will be Asia that will drive the surge in LNG demand. Expansion in gas connections in China and India are expected to push up gas use in Asia and the world as a whole, Shell noted.
As demand is set to jump by 60% over the next decade and a half, more investment is needed to ensure supply can keep up with demand, the supermajor said.
“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, Senior Vice President for Shell LNG Marketing and Trading.
Earlier this month, Shell said it expects global LNG demand to jump at least through 2030 in all three scenarios it has modeled in a new energy security report.
