Shell Raises LNG Demand Outlook as Energy Transition Slows
Shell forecast on Tuesday (2026-06-30) that global liquefied natural gas demand will rise 65% to nearly 700 million tonnes a year by 2050, as the company's tenth annual LNG outlook concluded that a slower-than-expected energy transition will keep gas consumption elevated for longer.5
The forecast arrives with ICE Endex TTF front-month gas trading at €43.83 and European storage refilling still a concern. Shell said European gas demand is set to plateau until 2030 rather than decline, reversing the trajectory most analysts had assumed, with LNG playing an expanding balancing role before demand falls after 2030.4
The scale of the supply challenge that Shell lays out is considerable. Around 180 million tonnes of new annual LNG supply is forecast to enter the market by 2030, improving the near-term supply picture. But the company estimates that roughly 200 million tonnes per year of new supply capacity will be needed beyond projects already under construction to meet demand through the 2030s and 2040s — a gap that would require significant new investment in liquefaction plants.5
That matters for project developers and their financiers now. Final investment decisions on long-cycle liquefaction capacity typically require decade-long commitments, meaning the window to sanction the projects Shell sees as necessary is already open. Shell has a direct commercial interest in the conclusion — the company is both a major LNG producer and trader — but the underlying demand numbers carry their own weight.5
Global LNG trade reached 422 million tonnes in 2025, up roughly 60% from 264 million tonnes when Shell published its first outlook in 2017. China's imports over the same period rose approximately 250%, and the number of countries importing LNG grew from 36 to 49. Those trends underpin Shell's long-run projection.5
South and Southeast Asia remain the growth engine. Those regions are forecast to account for around 40% of global LNG imports by 2050, driven by demand for lower-emission alternatives to coal. The Hormuz crisis has already tested supply routes this year, with India — which imports roughly 60% of its LNG through the strait — responding partly by turning back to domestic coal as high gas prices made the switch unavoidable.5,3
Smaller but faster-growing demand segments add to Shell's bullish case. LNG bunkering — the use of liquefied gas to fuel ships — is projected to grow seven-fold to 27 million tonnes by 2035 as maritime emissions rules tighten. Industrial use in markets without pipeline infrastructure is also expanding.5
The European near-term picture is more complicated. Shell's plateau-to-2030 view for European demand sits awkwardly alongside Kpler's forecast, published in May (2026-05-19), that EU gas demand will fall 8 billion cubic metres, or 2.5%, this year to 314 billion cubic metres, driven by high prices and renewable penetration. The Oxford Institute for Energy Studies, for its part, calculated that Europe needs 6% more gas — roughly 6 billion cubic metres — than it imported last year just to refill storage to the same level.2,1
Those near-term demand pressures leave European buyers caught between high injection requirements and a price level — TTF front-month at €43.83 — that incentivises demand destruction, particularly among industrial users. Shell's longer-run plateau thesis implies that demand won't fall far enough to eliminate the structural tightness that has characterised European gas markets since 2022, even as renewable capacity continues to grow.4
What gives the Shell outlook its strategic significance is less the 2050 endpoint — where uncertainty is vast — and more the 2030 supply horizon. The 180 million tonnes of committed capacity entering the market by then is either sufficient or it is not; the answer depends heavily on whether Chinese demand, which has driven LNG trade's growth for a decade, continues at anything like its recent pace. China's 250% import growth since 2017 cannot be extrapolated indefinitely, and the pace of domestic pipeline gas development from Russia and Central Asia introduces its own uncertainty.5
The 200 million tonne annual supply gap Shell identifies beyond currently committed projects will focus attention on the next wave of sanctioned liquefaction capacity, particularly from Qatar, the United States and East Africa. Whether buyers will sign the long-term offtake contracts developers need to reach final investment decision — given the transition uncertainty Shell's own report acknowledges — is the question the market will be pricing for the rest of the decade.5