Shell Predicts LNG Demand Will Rise 60% by 2040, What Are the Reasons?

Kapanlagi.com - Leading global energy company, Shell, has recently released an intriguing prediction: global demand for liquefied natural gas (LNG) is expected to soar by 60% by 2040! This prediction comes as a result of improvements in oil and gas energy infrastructure in countries like China and India, amid rising needs in various consumer countries.

In the LNG Outlook 2025 report, Shell notes that LNG trade in 2024 will only grow by 2 million tons, the lowest annual increase in the last decade. It is expected that there will be more than 170 million tons of new LNG supply ready to come online by 2030, with Qatar and the United States leading as the world's largest exporters.

Shell, which has been operating since 1890, has never taken the energy industry lightly. Each year, the company is capable of moving up to 60 million tons of fuel energy. So what makes this company predict well in advance about the trend of increasing use of natural gas resources or LNG? Here is the information, summarized by Kapanlagi.com, Wednesday (26/2).

1. Shell Predicts LNG Demand Will Jump 60% by 2040

Shell projects that by 2040, global demand for LNG will soar by 60%, reaching a staggering figure between 630 to 718 million tons per year.

Although the LNG market is expected to grow at a slower pace in 2024, significant expansion is predicted to occur in the coming decade, driven by increased investment in natural gas projects and the transition from coal to cleaner and more efficient gas.

2. The Reasons Behind That Prediction

The demand for LNG is surging, driven by global efforts for decarbonization and carbon emission reduction. Countries around the world are shifting to cleaner LNG compared to coal and oil, making it the primary choice for various sectors, from power generation to transportation.

The economic growth in Asia, particularly in China which plans to increase LNG import capacity and expand the gas network for 150 million people by 2030, as well as India targeting an additional 30 million households connected to the gas network in the next five years, is further accelerating this transition.

In Europe, LNG remains a crucial energy source to balance the fluctuating use of renewable energy and maintain energy resilience. All of this indicates a significant shift in energy investment strategies, where major companies are now prioritizing the development of natural gas as a long-term solution, rather than investing in conventional fossil fuels.

3. Natural Gas as a Future Industry Prospect

Natural gas is increasingly seen as a pillar of future energy, with many countries shifting from coal to LNG to meet the growing demands for electricity and industry. Technological innovations such as bio-LNG and synthetic LNG are also beginning to emerge as lower-carbon energy solutions that are more environmentally friendly.

In the maritime and land transportation sectors, LNG has become the new star capable of reducing greenhouse gas emissions by up to 85% compared to conventional fuels like diesel and gasoline. In various developed countries, fleets of ships and trucks are starting to switch to LNG as their primary fuel.

Moreover, the LNG market continues to grow rapidly thanks to innovations such as Floating Storage Regasification Units (FSRU), which allow the distribution of liquefied natural gas to remote areas without the need for expensive pipeline infrastructure.

“That’s why industry analysts predict that LNG demand will continue to grow slightly in Europe until the 2030s,” said the executive vice president for LNG at Shell, Cederic Cremers, as quoted by ft.com.

4. The Important Role of Natural Gas in Various Parts of the World

Europe is now the main focus in the LNG market, thanks to its dependence on gas to maintain the stability of the electricity grid, which is dominated by renewable energy sources such as wind and solar. With dwindling gas supplies from Russia, Europe is turning to LNG imports from the United States and Qatar.

On the other hand, Asia, particularly China and India, continues to make LNG the backbone of their energy strategies, with both countries increasing imports to support industrial growth and rural electrification. Japan and South Korea are also significant, remaining major LNG importers due to the widespread use of natural gas in the electricity and manufacturing sectors.

This shift underscores that natural gas will continue to be a primary energy source in the future, especially in regions experiencing rapid industrial growth and increasing energy demands.

5. Advantages of Natural Gas Compared to Other Fuels

On the esdm.go.id page, it is mentioned that natural gas is starting to become a choice for the community due to its advantages compared to other conventional fuels. This type of liquid chemical is then touted as one of the energy choices for the future with the following efficient aspects:

• More Environmentally Friendly because LNG can reduce carbon emissions by up to 85% compared to coal and petroleum, making it a cleaner solution for the energy and heavy industry sectors.
• Higher Efficiency LNG has a greater energy density value compared to CNG and LPG, and can be stored at low pressure, making it more efficient in terms of transportation and storage.
• More Competitive Prices LNG has lower operational costs compared to non-subsidized diesel, making it a more economical choice for industry and transportation.

With these various advantages, it is not surprising that many countries are beginning to shift their investments to natural gas infrastructure, in order to ensure a more stable and sustainable energy availability in the future.

6. FAQ

1. Why is LNG demand predicted to increase sharply in 2040?

Due to economic growth in Asia, efforts to decarbonize industries, and increased use of LNG in the transportation sector.

2. Is LNG better compared to coal and crude oil?

Yes, LNG is cleaner, more efficient, and produces lower carbon emissions compared to other fossil fuels.

3. Which countries will be the main players in the LNG market in the future?

The United States and Qatar are predicted to be the largest exporters, while China and India will be the main LNG importers.

4. Will LNG prices continue to rise as demand increases?

LNG prices will depend on supply availability and the development of natural gas infrastructure projects worldwide.

(kpl/rmt)