New LNG supply will be limited until the second half of 2025 with Europe’s need to refill gas storage competing with Asian demand, according to Shell’s annual LNG Outlook report.
Forecast LNG demand growth is in the 17 million to 26 million tonnes per annum range. Global LNG supply growth is coming, but the timing remains uncertain due to geopolitical tensions, regulatory hurdles, start-up risks, civil unrest, labour shortages and supply chain bottlenecks, said the report.
Source: Shell LNG Outlook
Trade reached 407 million tonnes in 2024, just three million tonnes up on 2023, marking the lowest annual supply addition for 10 years. More investment is needed to ensure supply can keep up with demand, it was noted.
Demand for LNG strengthened in Asia during the first half of 2024, as China took advantage of lower prices and India bought more cargoes to help meet strong power demand, while European imports fell 23 million tonnes due to strong renewable energy generation and a continued weakness in industrial gas demand.
Overall LNG demand is forecast to rise significantly, though, with 170 million tonnes of new supply set to come on stream in 2030. By 2040, global demand is projected to grow 60%, driven by Asian economic growth, the need to decarbonise heavy industry and transport, and the emerging growth of the energy-intensive tech sector.
The LNG industry is increasing its reliance on US supply, the report finds. By 2035, US supply could be twice the size of South Korea and Japan’s 2024 LNG demand combined.
The Middle East dominated contracting during 2024, while US selling slowed after record signings between 2021 and 2023.
