That roar looks set to continue too, particularly with major projects in liquefied natural gas (LNG) in the US and Qatar now coming onstream.
Indeed, some 170 million tonnes of new LNG supply is due to come to market this decade, as the US expands its lead as the world’s largest LNG exporter.
This will help feed an LNG demand that is likely to rise some 60%, worldwide, by 2040, according to Shell - one of the world’s chief natural gas suppliers and the world’s largest LNG trader.
The focus for much of that growth will be Asia, as economic growth in that geography continues to drive demand.
China and India – which saw 7% and 10% annual increases in natural gas demand in 2024 alone, according to the IEA – are set to see many millions more of their citizens connect to natural gas grids in the years to come.
This will bring major benefits to public health, as more polluting fuels are replaced, while also reducing per capita carbon emissions.
At the same time, some Asian countries that are currently gas exporting, such as Indonesia and Malaysia, are diverting more of their declining domestic gas resources to domestic growth, as their economies expand. This will create a decline in their contribution to global supply.
In Europe, there is also a rapid falling-off of domestic gas resources, while Russia’s 2022 invasion of Ukraine led to a shift away from piped Russian gas.
This creates gaps in supply In Asia and Europe, with these both being increasingly filled by imported LNG from the Middle East and North Africa (MENA) region, as well as the US.
Crucially, too, LNG supplies by tanker have remained largely unaffected by recent conflicts, demonstrating the continuing reliability of LNG contracts even under duress. Average LNG shipping charter rates hit a record low in November 2024, despite conflicts in the Middle East, according to Shell figures.
Mind the Gap
Gas, then, is surging – but what is also key is that this is not happening as an alternative to renewable energy, but as a compliment to it.
The share of solar, wind, biogas and other renewables in global energy supply has continued to grow alongside natural gas.
This is because both renewables and natural gas are key components in meeting an even bigger surge – demand for electricity.
Indeed, in Europe and Japan in particular, LNG is already filling a growing gap between “energy diversification ambitions and actual investment levels,” according to Shell’s LNG Outlook 2025 report.
Hard-to-electrify sectors, such as marine transport, are a key example of this.
Large, ocean-going vessels are highly resistant to conversion to battery power, but nowadays, LNG-fired ship’s engines are becoming increasingly common, particularly in larger vessels.
Natural gas fired electricity generation also provides a flexible balance-of-system resource while grids tackle the challenges that variable renewable energy (VRE) poses for grid stability.
Further ahead, we may also see bio-LNG (liquefied biomethane) used to power more of the world’s sea and air transport, as well as generate electricity. Yet natural gas is likely to keep a major share of these markets to 2030 and beyond. The existing LNG infrastructure can also be re-purposed for bio-LNG in future, and for liquefied synthetic gas (LSG), which may also increasingly come onstream in the years ahead.
Global Reach
As a result of the above trends, Shell’s future watchers predict global natural gas demand to rise from just under 4 trillion cubic metres (tcm) in 2024 to just over 4.5 tcm in 2040.
In all of its future forecasts, Shell’s Energy Security Scenarios 2025 report foresees similar levels of LNG growth up to 2030. After that, there is a divergence, depending on whether the world becomes more focused on energy security (the ‘Archipelagos’ scenario), emissions reductions (the ‘Horizon’ scenario), or forges ahead full speed with artificial intelligence (AI) – the ‘Surge’ scenario.
In Archipelagos and Surge, demand for LNG is forecast to be around 50% higher in 2060 than it is today, while in Horizon, it returns to a similar level to 2020.
The future is therefore very much one in which natural gas continues to have a major role in energy demand and supply – whether that is in powering ships, generating electricity, heating homes or cooking for a booming global population.
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