Global LNG demand will increase by around 60% by 2040, driven by economic expansion in Asia, emissions reductions in heavy industry and transport, and the growing impact of AI, Shell has forecast in its LNG Outlook 2025.
Industry forecasts estimate LNG demand to reach between 630 million and 718 million tonnes annually by 2040, exceeding previous projections.
In 2024, global LNG trade rose by just 2 million tonnes, marking the smallest annual increase in a decade, with total trade reaching 407 million tonnes due to limited new supply development. Over 170 million tonnes of new LNG supply is expected by 2030, predominantly supporting growing Asian gas demand, though project start-up timelines remain uncertain.
“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.
“LNG will continue to be a fuel of choice because it’s a reliable, flexible and adaptable way to meet growing global energy demand.”
China is expanding its LNG import capacity and aims to connect 150 million people to piped gas by 2030. India is also advancing its natural gas infrastructure, planning to provide gas connections to 30 million people within five years.
LNG demand from the shipping sector is forecast to surpass 16 million tonnes per year by 2030, a 60% rise from previous estimates, driven by increasing orders for LNG-powered vessels. The fuel is gaining traction in maritime and road transport due to cost-effectiveness and emissions reductions, with potential for lower-carbon alternatives such as bio-LNG and synthetic LNG.
In Europe, LNG will remain crucial through the 2030s to complement the expansion of intermittent renewable energy and bolster energy security. Existing gas infrastructure may be repurposed for bio-LNG, synthetic LNG, and green hydrogen imports in the longer term.
LNG supply expansion will be led by Qatar and the USA, with the latter poised to strengthen its position as the world’s top LNG exporter, potentially reaching 180 million tonnes annually by 2030—accounting for a third of global supply.
Spot LNG prices hit their lowest level since early 2022 in early 2024 before rebounding mid-year due to supply delays. Strong Asian demand supported the recovery, with China importing 79 million tonnes of LNG throughout the year, while India recorded a 20% import increase to 27 million tonnes, driven by surging summer power demand.
In Europe, LNG imports fell by 23 million tonnes, or 19%, due to robust renewable energy generation and weak industrial gas demand. However, cold winter conditions and low wind power output led to significant gas storage withdrawals. The expiration of Russian pipeline gas flows via Ukraine on December 31, 2024, further tightened the market, pushing prices higher.
Europe is expected to increase LNG imports in 2025 to replenish storage levels.
Source: theenergyyear.com