Shell sees global LNG demand rising exponentially despite geopolitical volatility

Global demand for LNG is expected to rise by around 65% to nearly 700 million tonnes a year by 2050, according to Shell's latest LNG Outlook 2026 report.

The forecast comes after the LNG market weathered one of its biggest disruptions since the 2022 energy crisis, thanks to geopolitical tensions in the Middle East. 

Conflict in the region temporarily shut in around one-fifth of the world's monthly LNG supply by disrupting shipping through the Strait of Hormuz, sending Asian spot prices above $20 per million British thermal units (MMBtu).

Despite the shock, Shell says the industry demonstrated greater resilience than during previous crises.

Global LNG trade reached a record 422 million tonnes in 2025, up nearly 60% from 264 million tonnes when Shell first published its LNG Outlook in 2017.

Over the same period, the number of LNG-importing countries has increased from 36 to 49, while LNG-fuelled vessels have grown from 81 to more than 870, reflecting LNG's expanding role across the global energy system. 

“The conflict created a system-wide shock with disruption cascading across all segments of the economy, but the LNG industry has proved resilient and able to adapt to changing market conditions,” said Cederic Cremers, President of Integrated Gas at Shell.

“The conflict created a system-wide shock with disruption cascading across all segments of the economy, but the LNG industry has proved resilient and able to adapt to changing market conditions,”

- Cederic Cremers, President of Integrated Gas at Shell

Supply expansion gathers pace

Shell expects around 180 million tonnes per annum (mtpa) of new liquefaction capacity to come online by 2030, led by projects in North America and Qatar.

The additional supply is expected to improve affordability and strengthen energy security after several years of tight markets.

However, the company warns that projects already under construction will not be sufficient to meet long-term demand.

It estimates that around 200 mtpa of additional liquefaction capacity will be needed through the 2030s and 2040s.  

The United States is expected to remain the world's leading LNG supplier, with exports projected to account for around 23% of US gas production by 2035, increasing the market's flexibility and supply diversity. 

Asia remains the growth engine

Much of the future demand will come from Asia, with South and Southeast Asia expected to account for around 40% of global LNG imports by 2050.

Growing populations, industrialisation and efforts to replace coal with lower-emission fuels are expected to drive imports across India, Vietnam, Bangladesh and the Philippines. 

According to Shell, the region will require more than 140 mtpa of additional regasification capacity by mid-century to support rising demand. 

China is expected to remain a major LNG importer despite slower purchases this year, while Japan could see higher gas demand from the rapid expansion of AI and data centres, adding a new source of electricity demand. 

Europe and shipping underpin demand

Europe is also expected to remain a significant LNG market as domestic gas production declines and the region continues to diversify away from Russian pipeline gas. 

“LNG will continue to have a vital role to deliver energy security to Europe, to balance intermittent renewables as domestic gas production declines,” Shell said in a statement. 

LNG will continue to have a vital role to deliver energy security to Europe, to balance intermittent renewables as domestic gas production declines

Shell estimates Europe imported more than 125 mtpa of LNG in 2025 and expects the fuel to remain essential for balancing intermittent renewable generation and supporting energy security. 

Beyond power generation, LNG is rapidly gaining ground as a marine fuel. Shell forecasts LNG bunkering demand will increase seven-fold to 27 million tonnes by 2035, supported by a growing global fleet of LNG-powered vessels. 

Investment remains critical

“While more investment in both supply and demand infrastructure is needed, the long-term outlook remains strong and LNG will continue to be a stabilising force in the global energy system,” said Cremers. 

The industry's response to the Strait of Hormuz disruption demonstrates how much the market has evolved since the Russia-Ukraine energy crisis.

Long-term contracts now account for roughly two-thirds of LNG trade, while expanded regasification capacity, larger storage inventories and more diversified supply have reduced market volatility. 

Shell’s outlook broadly reflects projections from the International Energy Agency, which sees natural gas remaining an important part of the global energy mix under current policy settings, particularly in emerging economies where demand for reliable and affordable energy continues to grow.

Meeting this projected demand, however, will depend on continued investment across the entire value chain: from liquefaction plants and shipping fleets to import terminals and pipeline infrastructure.