LONDON/SINGAPORE, Feb 25 (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.

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.

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.

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, the report

said.

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.

While Asian LNG demand strengthened in the first half of

last year with lower prices and hotter weather spurring power

generation needs, Europe's imports fell in the first three

quarters of 2024 before demand picked up as cold weather led to

faster depletion of storage inventories.

Europe's LNG demand is expected 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," Shell's report

said.