Shell Projects 60% Rise in Global LNG Demand by 2040

Global demand for liquefied natural gas (LNG) will increase by 60% by 2040, according to Shell's LNG Outlook 2025 released today. The growth forecast is primarily driven by economic development in Asia, industrial emissions reduction initiatives, and energy requirements for artificial intelligence technologies.

Industry analysts now predict LNG demand will reach between 630-718 million tonnes annually by 2040, an upward revision from previous estimates. This comes as global LNG trade grew by just 2 million tonnes in 2024 to 407 million tonnes, marking the slowest annual growth in ten years due to limited new supply development.

"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.

More than 170 million tonnes of new LNG supply is expected to come online by 2030 to meet increasing demand, particularly in Asia, though the timeline for new project completion remains uncertain.

China is expanding its LNG import capacity while developing infrastructure to connect 150 million additional people to piped gas by 2030. India increased its LNG imports by 20% to 27 million tonnes in 2024 and plans to connect 30 million more people to natural gas services in the next five years.

The maritime industry represents a growing market for LNG, with shipping demand projected to reach over 16 million tonnes annually by 2030. LNG has emerged as a transition fuel for vessels seeking to reduce emissions while the industry develops lower-carbon alternatives.

The United States is expected to cement its position as the world's largest LNG exporter, potentially reaching 180 million tonnes annually by 2030, approximately one-third of global supply. Qatar will also significantly contribute to future supply growth.

LNG has been a key component of global energy security since the 2022 disruption of European gas markets following Russia's invasion of Ukraine. While Europe's LNG imports fell by 19% in 2024 due to strong renewable generation, demand increased in late 2024 as cold weather and low wind output coincided with the expiration of Russian pipeline gas flows through Ukraine on December 31.

The global LNG market has experienced significant volatility in recent years. Early 2024 saw spot prices reach their lowest levels since 2022, before recovering mid-year as new supply development faced delays. Europe is expected to increase LNG imports in 2025 to replenish depleted gas storage facilities.

LNG, natural gas cooled to -162°C (-260°F) for transportation by specialized vessels, has gained importance in global energy markets as countries seek to reduce coal consumption while managing the transition to renewable energy sources.