More than 170 million tonnes of new LNG supply are set to be available by 2030.
Global LNG trade grew by only 2 million tonnes in 2024, the lowest annual increase in 10 years, to reach 407 million tonnes due to constrained new supply development. The early part of 2024 saw spot LNG prices fall to their lowest level since early 2022, but prices recovered by mid-year due to delays in the development of new supply capacity. Demand for LNG strengthened in Asia during the first half of 2024 as China took advantage of lower prices, importing 79 million tonnes during the year. India bought record volumes to help meet stronger power demand due to hotter weather in early summer. Its imports rose to 27 million tonnes, a 20% increase from 2023.
While LNG continued to play a vital role in European energy security in 2024, imports fell by 23 million tonnes, or 19%, due to strong renewable energy generation and a limited recovery in industrial gas demand. However, cold winter temperatures and spells of low wind power generation towards the end of the year drove strong gas storage withdrawals which, combined with the expiry of Russian pipeline gas flows to Europe through Ukraine on Dec 31, 2024, drove up prices. Europe is expected to increase imports of LNG in 2025 to refill its gas storage.
Shell predicts a robust 60% increase in global LNG demand by 2040, up from their 2024 forecast of a 50% rise. This equates to demand growing from around 404 million tonnes per year in 2024 to between 630 and 718 million tonnes by 2040. The key drivers? Economic growth in Asia—especially China and India—where LNG import capacity is expanding, alongside coal-to-gas switching in heavy industry and transport. Shell also highlights emerging factors like artificial intelligence boosting energy needs, though this is less quantified. China is significantly increasing its LNG import capacity and aims to add piped gas connections for 150 million people by 2030 to meet increasing demand. India is also moving ahead with building natural gas infrastructure and adding gas connections to 30 million people over the next five years.
Europe will continue to need LNG into the 2030s to balance the growing share of intermittent renewables in its power sector and to ensure energy security. In the longer term, existing natural gas infrastructure could be used to import bio-LNG or synthetic LNG and be repurposed for the import of green hydrogen.
In the marine sector, a growing order book of LNG-powered vessels will see demand from this market rise to more than 16 million tonnes a year by 2030, up 60% from the previous forecast. LNG is becoming a cost-effective fuel for shipping and road transport, bringing down emissions today and offering pathways to incorporate lower-carbon sources such as bio-LNG or synthetic LNG.
On the supply side, Shell expects LNG production to hit around 550 million tonnes per year by 2030, fueled by projects in Qatar and the U.S. The USA is set to extend its lead as the world’s largest LNG exporter, potentially reaching 180 million tonnes a year by 2030 and accounting for a third of global supply.
Beyond that, the prognosis splits into scenarios: in their “Surge” scenario, supply could reach 700 million tonnes past 2040 if demand stays strong; in the “Horizon” scenario, it peaks in the early 2030s as net-zero goals tighten. For Shell’s own operations, they’ve lowered their Q4 2024 production forecast to 6.8-7.2 million tonnes (from 6.9-7.5 million), citing operational tweaks, but long-term, they’re banking on assets like LNG Canada, where a 20-year supply deal was recently inked.
The catch? Shell warns that more investment is needed to match this demand growth, hinting at potential delays like the still-pending final investment decision for LNG Canada Phase 2 (1.8 billion cubic feet per day). Critics, like the Institute for Energy Economics and Financial Analysis, argue this optimism might overshoot, with a possible supply glut looming if Asian demand falters due to economic or logistical hurdles.
“Upgraded forecasts show that the world will need more gas for power generation, heating and cooling, industry and transport to meet development and decarbonisation goals,” Tom Summers, Senior Vice President for Shell LNG Marketing and Trading, said.
“LNG will continue to be a fuel of choice because it’s a reliable, flexible and adaptable way to meet growing global energy demand.”
/Shell, X/