Shell forecasts global LNG demand will rise 65% by 2050, driven by Asia, energy security, decarbonization goals, and expanding liquefaction capacity.
Shell projects a significant 65% increase in global liquefied natural gas (LNG) demand by 2050, reaching approximately 700 million tonnes annually. This forecast highlights LNG's growing importance for global energy security and as a transitional fuel. The company's 2026 LNG Outlook indicates that while 422 million tonnes of LNG were traded in 2025, disruptions in shipping, particularly through the Strait of Hormuz, have impacted 2026 trade volumes. However, new North American liquefaction facilities and improved existing plant performance have partially mitigated these effects. Shell expects strong demand growth to resume in 2027.
Several factors underpin the projected surge in LNG demand. Economic growth in developing Asian economies is a primary driver, particularly in South and Southeast Asia. These regions are increasingly turning to LNG to support industrial expansion and power generation, often as a cleaner alternative to coal. China, despite a modest economic recovery, saw an 8% increase in gas demand, becoming the world's largest LNG importer. Additionally, the growing need for energy security and reliable power, especially as intermittent renewable energy sources expand, boosts LNG's appeal as a flexible backup. Emerging demand segments, such as LNG bunkering for shipping and the power needs of data centers, also contribute to the anticipated growth.
LNG is considered a crucial "bridge fuel" in the global energy transition. It offers a lower-carbon alternative to other fossil fuels like coal and oil, significantly reducing emissions when used for electricity generation. This makes it vital for countries aiming to decarbonize their industrial sectors and power grids while scaling up renewables. LNG provides the stable, on-demand power necessary to balance grids that integrate more variable renewable sources like solar and wind.
To meet the rising demand, substantial investment in new LNG liquefaction plants and import infrastructure will be necessary, particularly after 2030. Shell forecasts approximately 180 million tonnes of new annual supply to enter the market by 2030, enhancing gas availability and affordability. The United States is poised to be a major contributor to this supply growth, with its LNG industry expected to double its economic footprint by 2040. This expansion could add $1.3 trillion to US GDP and support nearly 500,000 jobs annually through 2040. However, the industry faces challenges, including geopolitical tensions affecting shipping routes and the need to address methane emissions across the gas value chain.
Impact on Products:
The projected increase in global LNG demand will stimulate higher production, transportation, and consumption of natural gas while encouraging investments in liquefaction plants, storage terminals, pipelines, and LNG shipping infrastructure. Rising LNG availability is expected to support gas-fired power generation, petrochemical feedstock availability, and industrial fuel switching from coal to cleaner natural gas. Stronger LNG trade will also benefit industries producing cryogenic equipment, compressors, storage tanks, catalysts, and engineering materials used across the LNG value chain. Additionally, expanding LNG infrastructure will increase demand for construction chemicals, specialty polymers, insulation materials, and industrial gases required for plant development and maintenance.
Impact on Prices of Chemical Commodities Tracked by ChemAnalyst
Shell's projection of a 65% rise in global LNG demand by 2050 is expected to have a mixed impact on chemical commodity prices tracked by ChemAnalyst. Greater investments in LNG production and export capacity, particularly in North America, will improve long-term natural gas availability, which serves as a key feedstock for methanol, ammonia, hydrogen, and numerous petrochemicals. Over the medium to long term, this could help stabilize or moderate production costs for gas-based chemicals. However, in the near term, expanding LNG exports may tighten regional gas supplies and keep natural gas prices elevated during periods of peak demand, increasing manufacturing costs for ammonia, methanol, urea, and downstream derivatives. Higher LNG infrastructure investments will also boost demand for polymers, insulation materials, engineering plastics, and specialty chemicals used in construction. Overall, ChemAnalyst may observe short-term price volatility in gas-linked chemicals, followed by greater market stability as new LNG capacities become operational after 2030.
