Oil & Gas

Global demand for liquefied natural gas (LNG) is projected to surge by approximately 60% by 2040, driven by Asia’s economic expansion, decarbonisation efforts in industry and transport, and the increasing energy needs of artificial intelligence. According to Shell’s LNG Outlook 2025, global LNG demand is expected to reach between 630 million and 718 million tonnes annually by 2040, surpassing last year’s forecasts. The report highlights the growing role of LNG in meeting energy needs while supporting cleaner energy transitions.

Despite a slow increase of just 2 million tonnes in global LNG trade in 2024—the lowest growth in a decade—Shell expects a sharp rise in supply. More than 170 million tonnes of new LNG supply is anticipated by 2030, though uncertainties remain over project start-up timelines. China and India are key drivers of demand, with both countries expanding natural gas infrastructure. China plans to add piped gas connections for 150 million people by 2030, while India aims to connect 30 million people to gas networks over the next five years.

The shipping industry is also set to experience a 60% increase in LNG demand by 2030, largely due to the expansion of LNG-powered vessels. Meanwhile, Europe’s reliance on LNG is expected to continue into the 2030s, supporting both renewable energy integration and energy security. On the supply side, Shell highlights that Qatar and the U.S. will dominate production growth, with U.S. exports forecasted to hit 180 million tonnes annually by 2030, accounting for a third of the global supply.

Analysts at RBC Capital reacted to Shell’s findings, noting that the company remains a dominant player in the LNG market. They emphasized the significance of the upcoming LNG Canada phase 1 start-up and the possible sanctioning of phase 2, which are crucial for both Shell’s investment strategy and overall market balance. While debates persist over supply-demand balances, the long-term expansion of the LNG market appears inevitable, with Shell positioned as a key industry leader.