Finance
Shell expects 60% rise in global LNG demand by 2040 as Asia leads growth
Published by Global Banking and Finance Review
Posted on February 25, 2025
4 min readLast updated: January 25, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on February 25, 2025
4 min readLast updated: January 25, 2026
Shell forecasts a 60% rise in global LNG demand by 2040, driven by Asia's growth and cleaner fuel transitions. The US and Qatar will lead supply.
By Marwa Rashad and Emily Chow
LONDON/SINGAPORE (Reuters) -Global demand for liquefied natural gas is estimated to rise by around 60% by 2040, driven largely by economic growth in Asia, AI impact and efforts to cut emissions in heavy industries and transportation, Shell said in an annual report on Tuesday.
Demand for natural gas continues to rise globally as the world transitions to cleaner fuels. Industry forecasts LNG demand to reach between 630 million and 718 million metric tons a year by 2040, Shell said in its 2025 annual LNG outlook.
The latest view from the world's largest LNG trader is higher than last year's forecast, which pegged global LNG demand in 2040 at 625 million to 685 million tons per year.
"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," said Tom Summers, Shell's senior vice president for LNG marketing and trading.
China, the world's top LNG importer, and India are increasing LNG import capacity and gas related infrastructure to meet rising demand, Shell added.
Natural gas imports into China are forecast to rise this year as economic stimulus plans lift industrial demand, although trade tensions with the U.S. may cap growth.
China saw total natural gas imports, including pipeline supply, of 131.69 million tons last year, the highest since at least 2013. Of that volume, 76.65 million tons was LNG, according to its customs data.
In India, the International Energy Agency expects natural gas consumption to jump 60% between 2023 and 2030, doubling the country's need for LNG imports, as domestic output is expected to grow much more slowly than demand.
While a young population and economic growth are driving an increase in gas demand in emerging markets Algeria, Egypt, Malaysia and Indonesia, domestic production in those markets is seen declining over the next 15 years by up to 50 million tons, equating to less available gas for export, the report said.
SUPPLY SIDE
To meet rising demand, particularly in Asia, more than 170 million tonnes of new LNG supply is set to be available by 2030, said Shell. The start-up timings of new LNG projects, however, are uncertain, Shell said.
Several LNG projects have seen delays over the past two years due to geopolitical tensions, regulatory hurdles, labour shortages and supply chain bottlenecks, delaying the availability of around 30 million tons of new LNG supply, the size of India's LNG imports, to 2028.
In 2024, global LNG trading rose by only 2 million tons to 407 million tons due to constraints on development of new supply, marking the smallest annual increase in the past decade, the report said.
The report showed that anticipated supply during the period was between 7 million and 20 million tons but it undershot even the lowest end of the forecast range.
The report expects Europe's LNG demand to grow in 2025 and beyond.
"Europe will continue to need LNG into the 2030s to balance the growing share of intermittent renewables in its power sector. 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," the report said.
Significant growth in LNG supply will come from top exporter the United States, potentially reaching 180 million tons a year by 2030 and accounting for a third of global supply.
Analysts expect that together with Qatar’s massive North Field expansion project set to come online in 2026, the United States and Qatar could provide around 60% of global LNG supply by 2035.
(Reporting by Marwa Rashad in London and Emily Chow in Singapore; Editing by Sonali Paul and David Evans)
The main topic is the projected 60% increase in global LNG demand by 2040, primarily driven by growth in Asia.
Economic growth in Asia, cleaner fuel transitions, and increased import capacity in China and India are key drivers.
Geopolitical tensions, regulatory hurdles, and supply chain issues are causing delays in new LNG projects.
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