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 driven mainly by economic growth in Asia, industrial emissions reduction initiatives and energy requirements for artificial intelligence technologies.
Industry analysts now estimate that LNG demand will reach between 630-718 million tonnes annually by 2040, an upward revision from previous estimates. This comes as global LNG trade grows by just 2 million tonnes to 407 million tonnes in 2024, marking the slowest annual growth in ten years due to limited new supply growth.
“The world will need more gas for power generation, heating and cooling, industry and transport to meet growth and decarbonisation targets,” said Tom Summers, senior vice president of Shell LNG marketing and trading. More than 170 million tonnes of new LNG supply is expected to come online by 2030 to meet growing demand, particularly in Asia, although timelines for new project completion remain uncertain.
China is expanding its LNG import capacity while developing infrastructure to connect 150 million additional people to piped gas by 2030. India is set to increase its LNG imports by 20% to 27 million tonnes in 2024 and plans to connect 30 million more people to natural gas services over the next five years.
The maritime industry represents a growing market for LNG, with shipping demand projected to reach more than 16 million tonnes annually by 2030. LNG has emerged as a transition fuel for ships that want to reduce emissions while the industry develops low-carbon alternatives.
The United States is expected to consolidate its position as the world’s largest LNG exporter, potentially reaching 180 million tonnes annually by 2030, representing about a third of global supply. Qatar will also contribute significantly to future supply growth.
LNG has been a key component of global energy security since the disruption of European gas markets in 2022 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 generation coincided with the end of Russian pipeline gas flows through Ukraine on December 31. The global LNG market has experienced significant volatility in recent years. Spot prices in early 2024 fell to their lowest level since 2022, then prices recovered in mid-year as new supply developments delayed supply growth.
Europe is expected to increase LNG imports to replenish depleted gas storage facilities in 2025.
LNG, natural gas cooled to -162°C (-260°F) for transport by specialized ships, has gained importance in global energy markets as countries seek to reduce coal consumption while managing the transition to renewable energy sources.
