Asian Market Drives Future Growth, Shell (SHEL.US) Projects Global LNG Demand to Surge at Least 54% by 2040

Shell, the world’s largest liquefied natural gas (LNG) trader, announced on Monday that driven by sustained demand growth in Asia, global LNG demand is expected to increase by 54% to 68% from 422 million tons in 2025 to 2040, and by 45% to 85% by 2050.

A year ago, Shell forecasted that global LNG demand would rise to between 630 million and 718 million tons annually by 2040. On Monday, the company narrowed its forecast range for 2040 to 650 million to 710 million tons per year and for the first time provided a demand forecast range for 2050—610 million to 780 million tons per year. The company also plans to increase its LNG sales volume by 4% to 5% annually.

Shell also noted that due to disruptions caused by the Iran conflict to international oil and LNG trade, the Monday forecast is not final.

Responding to Climate and Environmental Organization Proposals

At Shell’s 2025 annual shareholder meeting, a resolution proposed by climate action investors ACCR and some shareholders (managing assets totaling $86 billion) received about 21% support. The resolution questioned Shell’s LNG demand outlook. Shareholders including Brunel Pension Partnership, Greater Manchester Pension Fund, and Merseyside Pension Fund demanded that Shell further clarify how its LNG growth assumptions align with global energy demand and explain how it plans to achieve net-zero emissions before 2050.

Shell responded on Monday, defending its LNG strategy by stating that this ultra-low-temperature natural gas will become a key balancing fuel in future energy systems, and that its related projects are competitive in terms of cost and emissions.

The energy giant said that global natural gas consumption may peak in the 2030s, having already peaked in regions like Europe and Japan, but LNG demand is expected to continue growing. Shell added that by 2040, LNG will account for more than half of the overall growth in natural gas demand, with Asia contributing 70% of that increase.

ACCR’s Concerns Remain

Nick Mazan, head of oil and gas strategy at ACCR, pointed out that Shell’s statement fails to fully explain how LNG will compete with renewable energy and other sources in terms of price and emissions. He stated that geopolitical crises causing LNG prices to soar could suppress demand.