Shell has further increased its forecast for global LNG demand despite growing investor pushback questioning the accuracy of its predictions.
Global demand for liquefied natural gas could rise by 60% by 2040, according to Shell’s latest LNG outlook. The prediction is even more bullish than last year’s forecast, which projected a 50% rise.
Economic growth in Asian markets, the decarbonisation of high-emitting industries, and the global shipping industry will be the driving forces behind the surge in demand, the Anglo-Dutch energy giant believes.
However, even ahead of the announcement, Shell’s LNG forecast has been questioned by some of its investors, including Brunel, Greater Manchester Pension Fund, and Merseyside Pension Fund. These investors have filed a resolution alongside the Australasian Centre for Corporate Responsibility (ACCR), demanding greater transparency.
Investors point out that even the 2040 prediction of a 50% increase is significantly higher than the forecasts produced by the International Energy Agency (IEA). They also warn that Shell’s LNG demand outlook has not been materially revised in response to major changes in the global energy market, such as the rapid increase in renewable energy capacity.
They caution that Shell has more uncontracted LNG than any other independent oil and gas company, making it highly exposed to value erosion should prices be lower than anticipated.
Indeed, the IEA predicted in its latest Global Energy Outlook that the world will face an oversupply of LNG by the end of the decade.“A huge wave of LNG is going to hit the market in 2026, mainly coming from Qatar and the US, where we see most growth,” said IEA executive director Fatih Birol when presenting the forecast at the end of 2024.
This oversupply would lead to a 50% increase in available export capacity by the end of 2030, the IEA said.
Shell's 2025 AGM is due to be held on 20 May in London.
