Shell Predicts 60% LNG Demand Increase by 2040

Shell plc has released its annual LNG Outlook, projecting a 60% increase in global liquefied natural gas (LNG) demand by 2040, primarily driven by economic growth in Asia and the need for emissions reductions in heavy industry and transport. The report indicates that while demand is expected to grow significantly, new LNG supply will be limited until the second half of 2025 due to geopolitical tensions, regulatory hurdles, and supply chain challenges. Approximately 170 million tons of new LNG supply is anticipated by 2030, with the US expected to play a major role in meeting this demand. The report also highlights that shipping will increasingly utilize LNG as fuel, with demand expected to exceed 16 million tons per year by 2030. Despite a drop in European imports in 2024, Asian demand for LNG has strengthened. Overall, while the outlook is optimistic for long-term demand, immediate supply constraints pose challenges for the industry.