Demand for LNG is expected to continue growing beyond 2040, according to energy major Shell.
In its 36-page Shell LNG Outlook 2024 — which is put out in advance of a webcast later today, Shell pictures LNG demand climbing to over 600 million tonnes by 2040 from around 400 mt in 2025.
“Demand for natural gas has peaked in some regions and globally is set to peak after 2040," Shell said.
“The global LNG market will continue growing into the 2040s, mostly driven by China’s industrial decarbonisation and strengthening demand in other Asian countries.”
The major identifies industry, heating and “emerging Asia” as the factors that will drive LNG demand growth.
Shell said declining domestic gas and growing power markets are set to drive South and South East Asia LNG imports but warned that this will be dependent on investment in regasification infrastructure.
“In the medium term, latent demand for LNG — especially in Asia — is set to consume new supply that is expected to come onto the market in the second half of the 2020s,” Shell said.
“To offset falling domestic gas production in South East Asia, significant infrastructure investment will be needed to access the LNG that these countries need for their economic development.”
China focus
For this decade the major sees China driving LNG demand growth both for industry and to meet its decarbonisation goals.
China’s gas demand is expected to rise by more than 50% by 2040, Shell said.
North America is expected to meet about 30% of total global LNG demand.
Shell said Europe will continue to need LNG to meet gas supply needs despite consensus for falling gas demand.
It highlighted that global LNG supply will expand this decade but said start-up timings are uncertain.
Shell said global trade in LNG reached 404 mt in 2023, up 7 mt on 2022
The energy giant said the US became the largest LNG exporter in 2023, shipping 86 mt of product.
Chinese gas demand grew 8% last year with the country overtaking Japan again to become the largest LNG importer.
Europe imported over 120 mt of LNG in 2023.
“Global trade in LNG expanded slightly in 2023, with tight supplies constraining growth and prices staying above historic averages,” Shell said. “A milder winter, high gas storage levels, modest economic recovery in China and lower demand in Europe helped balance the global gas market during 2023.”
