Shell: U.S. LNG to Meet 30% of Global Demand

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Abundant in shale natural gas, the U.S. is on pace to secure its position as the top exporter of liquefied natural gas (LNG), accounting for 30% of global supply by 2030, according to Shell plc (NYSE:SHEL) (London, England).

Shell on Tuesday released its annual forecast on the global sector for LNG, showing global demand could increase 60% from current levels by 2040, with much of the appetite coming from the growing economies of Asia.

Tom Summers, the head of LNG marketing and trade at Shell, said natural gas is a low-carbon fuel of choice for everything from power generation to heating and cooling.

"LNG will continue to be a fuel of choice because it's a reliable, flexible and adaptable way to meet growing global energy demand," he said in a statement.

It will be left to Qatar and the U.S. to meet much of that demand. Both are world leaders in deliveries, but the U.S. is at the top of the heap. Shell said it expected U.S. supplies to account for about 30% of the world's total by 2030.

IIR Energy found that domestic natural gas is recovering from the arctic winter weather that's gripped much of North America for the last two months, with production up about 1.4 billion cubic feet per day (Bcf/d) from last week.

That's keeping LNG export facilities well-supplied. Data show feedgas into the operational terminals was above 16 Bcf/d as of February 24, some 14% above the expected average for exports this year.

Feedgas is supporting the ramp-up of the Plaquemines facility in Louisiana. Venture Global LNG (NYSE:VG) (Arlington, Virginia) started operations at the plant only in December.

Total U.S. LNG exports as of Monday were at 16.2 Bcf/d. More is expected given the planned expansions at existing terminals and the recent announcement from Commonwealth LNG that it secured the permits necessary to build its proposed LNG export facility in Cameron Parish, Louisiana.

While North American supply chains for natural gas are largely interconnected, LNG trade is far more versatile as it avoids some of the geopolitical risk associated with interstate pipelines. That helped U.S. supplies fill the void left by sanctions imposed on gas-rich Russia for its 2022 invasion of Ukraine.

"Europe will continue to need LNG into the 2030s to balance the growing share of intermittent renewables in its power sector and to ensure energy security," Shell's annual report read. In a separate report, Woodside Energy Group (Perth, Australia), which has a strong LNG portfolio in its own right, said demand is supported as well by the switch from coal to natural gas in the power sector, particularly in Asia.

"Ongoing strong demand through this decade with a significant supply gap emerging in the 2030s continues to firm as the most likely scenario," said Meg O'Neil, Woodside's chief executive officer. "This will result in a strong price environment as customers continue to seek LNG from secure reliable suppliers."

Demand was nevertheless lackluster last year. Shell found that global trade barely nudged, posting its lowest year-on-year increase in a decade. A harsh winter, however, triggered a late-year surge in demand in 2024.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).