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Asia's economic growth to drive LNG demand increase

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China and India expand LNG infrastructure amid rising

demand

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US and Qatar to dominate LNG supply by 2035

(Adds details from the report)

By Marwa Rashad and Emily Chow

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.

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.