A seismic shift is underway in the global energy landscape, with Asia's voracious economic expansion poised to trigger an explosive 60% surge in liquefied natural gas (LNG) demand by 2040, according to Shell's groundbreaking LNG Outlook 2025. This revelation, a significant upward revision from previous projections, underscores the urgent need for a radical expansion of global LNG supply and infrastructure, signalling a pivotal moment in the world's energy transition.

The report paints a compelling picture of a world grappling with the dual imperatives of economic growth and decarbonization. Shell predicts that annual LNG demand will skyrocket to between 630 and 718 million tonnes by 2040, fuelled by Asia's relentless industrial expansion, the push for cleaner energy in heavy industries and transportation, and the burgeoning energy demands of artificial intelligence.

What sets this report apart is its stark acknowledgment of the recent supply-side stagnation. In 2024, global LNG trade experienced a mere 2 million tonne increase, the smallest in a decade. However, a dramatic reversal is anticipated by 2030, with over 170 million tonnes of new LNG supply capacity expected to come online. The question remains, however, whether this expansion will be sufficient to meet the surging demand, given the persistent delays in new project developments.

Tom Summers, Shell’s Senior Vice President for LNG Marketing and Trading, emphasizes LNG's indispensable role in bridging the gap between rising energy needs and decarbonization goals. He highlights LNG's versatility as a reliable and flexible fuel, crucial for power generation, heating, cooling, and industrial applications, particularly in rapidly developing regions.

Asia emerges as the epicentre of this LNG revolution. China's ambitious infrastructure projects, aimed at connecting 150 million people to piped gas by 2030, and India's rapid expansion of its gas infrastructure, targeting 30 million new connections in five years, demonstrate the region's insatiable energy appetite.

Beyond traditional power generation, the marine sector is poised to become a significant driver of LNG demand. The increasing adoption of LNG-powered vessels is projected to push demand from this sector to over 16 million tonnes annually by 2030, a 60% increase from earlier forecasts. LNG is emerging as a compelling alternative for shipping and road transport, offering a pathway to lower-carbon fuels through blending with bio-LNG or synthetic LNG.

Europe, while transitioning towards renewable energy, will continue to rely on LNG throughout the 2030s to ensure energy security and stability. The existing natural gas infrastructure will serve as a crucial conduit for future green hydrogen imports, positioning Europe as a key player in the evolving low-carbon energy landscape.

The U.S. and Qatar are set to dominate global LNG supply growth. By 2030, the U.S. is projected to become the world’s largest LNG exporter, potentially supplying 180 million tonnes annually, accounting for a third of global demand.

Despite recent price fluctuations, the LNG market is bracing for continued volatility. The confluence of surging demand in Asia and Europe, coupled with supply-side uncertainties, will create a dynamic and potentially turbulent market, particularly as Europe seeks to replenish its gas storage in 2025. This report is not simply a forecast, but a call to action, highlighting the urgent need for strategic investments and policy decisions to navigate the complex challenges and opportunities of the evolving global energy landscape.