Shell: LNG demand to grow 50% by 2040s

Global demand for liquefied natural gas (LNG) will continue growing into the 2040s, according to a recent report by Shell.

The energy major’s report, LNG Outlook 2024, argues LNG demand will rise by more than 50% in that time, spurred by coal-to-gas switching in China and as economies in Southeast Asia use it to support local growth.

Global trade in LNG reached 404 million tonnes in 2023, up from 397 million tonnes in 2022, with tight supplies of LNG constraining growth while maintaining prices and price volatility above historic averages. Demand for natural gas has already peaked in some regions but continues to rise globally, with LNG demand expected to reach around 625-685 million tonnes a year in 2040, according to the latest industry estimates.

“China is likely to dominate LNG demand growth this decade as its industry seeks to cut carbon emissions by switching from coal to gas,” said Steve Hill, Executive Vice President for Shell Energy. “With China’s coal-based steel sector accounting for more emissions than the total emissions of the UK, Germany and Turkey combined, gas has an essential role to play in tackling one of the world’s biggest sources of carbon emissions and local air pollution.”

Over the following decade, declining domestic gas production in parts of South Asia and Southeast Asia could drive a surge in demand for LNG as these economies increasingly need fuel for gas-fired power plants or industry. However, countries in South Asia and South-east Asia would need significant investments in gas import infrastructure.