- Shell projects that LNG demand will reach around 625-685 million tonnes annually by 2040.
- Industrial demand in China and economic development in South Asia and Southeast Asia would drive the growth.
Shell, a British energy group, forecasted that world demand for liquefied natural gas (LNG) would jump more than 50 per cent by 2040. This projection, revealed yesterday in its latest report titled “Shell LNG Outlook 2024”, is fuelled by China dumping coal.
According to Shell, demand for natural gas has already peaked in some regions but continues to rise globally. According to the latest industry estimate, the firm projects that LNG demand will reach around 625-685 million tonnes per year in 2040.
In addition, industrial demand in China and economic development in South Asia and Southeast Asia would drive the growth of global LNG demand. The executive vice president for Shell Energy, Steve Hill, said China would likely dominate LNG demand growth in the current decade as its industry seeks to cut carbon emissions by switching from coal to gas.
While LNG is cleaner than coal, it also produces greenhouse gases contributing to global warming. Industry and many governments argue that LNG is a “bridge fuel” between coal and renewables such as wind and solar. On Wednesday, Hill stated, “With China’s coal-based steel sector accounting for more emissions than the total emissions of the UK, Germany and Turkey combined, gas has an essential role to play in tackling one of the world’s biggest sources of carbon emissions and local air pollution”.
According to the firm, global trade in LNG reached 404 million tonnes last year, up from 397 million tonnes in 2022. Despite the slight uplift due to tight supplies,
Shell added, “LNG continued to play a vital role in European energy security in 2023, following a slump in Russian pipeline exports to Europe one year earlier. Last year saw gas prices retreat from record highs set in the wake of Russia’s invasion of Ukraine. However, gas prices and volatility remained significantly higher in 2023 than in the 2017-2020 period.”