Shell has published its LNG Outlook 2024, and predicted that the demand for liquefied natural gas (LNG) will grow globally by 50% on current levels by 2040.
In some countries, the demand for natural gas has peaked already, as renewables make up an increasing proportion of the energy mix, but the overall global demand is expected to continue increasing for some time.
Some 404 million tonnes of LNG were traded in 2023, with tight supply limiting growth opportunities. Nevertheless, industry estimates have it reaching 625–685 million tonnes a year in 2040.
Shell Energy Executive Vice President Steve Hill said the growth in the demand for LNG will come mostly from China, as it transitions from coal to gas in order to reduce its carbon emissions. He added:
“With China’s coal-based steel sector accounting for more emissions than the total emissions of the UK, Germany and Turkey combined, gas has an essential role to play in tackling one of the world’s biggest sources of carbon emissions and local air pollution.”
Shell, which also makes lubricant and grease products, pointed out that natural gas serves as a complement to renewable energy generation, so countries with renewable-heavy energy mixes can benefit from short-term flexibility in how they generate energy.
After the drastic fall in pipeline exports of Russian gas in 2022, LNG has played a key role in ensuring energy security in Europe. Despite overall demand for gas in Europe being lower in 2023, imports of LNG remained at roughly the same level.
