According to the LNG Outlook 2024 report, which was released this week by British energy giant Shell, the world’s demand for liquefied natural gas will rise by more than 50% in less than 20 years.
The economic expansion that is anticipated in China, as well as in South and Southeast Asian countries that are quickly transitioning from coal to gas in their industrial sectors, is anticipated to cause a spike in demand by 2040.
The paper states that global trade in the super-chilled fuel increased to 404 million tons last year from 397 million tons in 2022. According to the research, limited LNG supplies are“constraining growth while maintaining prices and price volatility above historic averages.”
Additionally, Shell stated that although the demand for natural gas has peaked in some areas, it is still growing internationally. By 2040, it projects that the annual demand for LNG will reach 685 million tons.
Executive vice president of Shell Energy Steve Hill commented on the prediction, stating that, “China is likely to dominate LNG demand growth this decade as its industry seeks to cut carbon emissions by switching from coal to gas.” He continued, “With China’s coal-based steel sector accounting for more emissions than the total emissions of the UK, Germany and Türkiye combined, gas has an essential role to play in tackling one of the world’s biggest sources of carbon emissions and local air pollution.”
Over the next ten years, there will likely be a sharp increase in demand for LNG due to the declining domestic gas supply in some regions of South and Southeast Asia, as these countries become more dependent on fuel for “gas-fired power plants or industry.” The infrastructure for gas import would also require large investments from the countries of South and Southeast Asia.
As per Shell’s statement, “Despite a well-supplied global market in 2023, the lack of Russian pipeline gas supply to Europe and a limited amount of LNG supply growth over the last year mean that the global gas market remains structurally tight.”
