Global LNG Demand Forecast to Surge By 60% By 2040

According to Shell’s LNG Outlook 2025, global demand for liquefied natural gas (LNG) is expected to rise by around 60% by 2040. This surge will be largely driven by economic growth in Asia, efforts to reduce emissions in heavy industry and transport, and the evolving role of artificial intelligence in energy sectors.

Projected LNG Demand

Industry forecasts now predict LNG demand will reach 630-718 million tonnes annually by 2040, an upward revision from previous predictions. However, in 2024, global LNG trade grew by only 2 million tonnes, marking the lowest annual increase in 10 years, reaching 407 million tonnes. This slow growth is attributed to constrained new supply development. By 2030, over 170 million tonnes of new LNG supply will be available, though the start-up timings of new projects remain uncertain.

LNG Demand in Asia

Asia remains the dominant driver of LNG demand. China is significantly expanding its LNG import capacity and plans to add piped gas connections for 150 million people by 2030. India is also investing heavily in natural gas infrastructure and will add gas connections for 30 million people over the next five years to accommodate rising energy needs.

Marine Sector Growth

LNG is becoming an increasingly cost-effective fuel for the marine sector. The demand from LNG-powered vessels is forecast to rise to 16 million tonnes a year by 2030, a 60% increase from previous projections. LNG is seen as an essential fuel for shipping and road transport, offering reduced emissions and the potential for incorporating lower-carbon alternatives such as bio-LNG and synthetic LNG.

Europe’s LNG Needs

Europe will continue to require LNG in the coming decades to balance the growing share of intermittent renewable energy in its power sector and to ensure energy security. Additionally, existing natural gas infrastructure could be repurposed to import bio-LNG, synthetic LNG, and green hydrogen in the long term.

Growth in LNG Supply from Qatar and USA

Significant growth in LNG supply will come from Qatar and the USA, with the latter poised to become the world’s largest LNG exporter. The USA is projected to increase its exports to 180 million tonnes annually by 2030, potentially accounting for one-third of global LNG supply.

Market Tightness in 2024

In the early months of 2024, spot LNG prices dropped to their lowest levels since early 2022. However, by mid-year, prices rebounded due to delays in the development of new supply capacity. Asia’s demand for LNG surged, with China importing 79 million tonnes in 2024, while India recorded 27 million tonnes, a 20% increase from 2023. Meanwhile, European LNG imports declined by 23 million tonnes (19%), driven by strong renewable energy generation and weaker industrial gas demand.

Europe’s LNG Imports in 2025

Europe’s LNG imports are expected to increase in 2025 to replenish gas storage reserves, particularly following cold winter temperatures and reduced wind power generation toward the end of 2024. Additionally, the expiry of Russian pipeline gas flows to Europe in December 2024 further elevated prices, highlighting Europe’s growing reliance on LNG for energy security.