LONDON/SINGAPORE: Global demand for liquefied natural gas (LNG) is estimated to rise by more than 50% by 2040, as China and countries in South and Southeast Asia use more LNG to support their economic growth, Shell said in an outlook report on Wednesday.

Global LNG trading rose by 1.8% to 404 million metric tons in 2023 from 397 million in 2022, Shell said in its 2024 annual LNG outlook, adding that tight supply is maintaining prices and price volatility above historic averages and constraining economic growth.

Although demand for natural gas has peaked in some regions, it continues to rise globally, and is expected to reach around 625-685 million tons per year in 2040 according to the latest industry estimates, the report said.

“China is likely to dominate LNG demand growth this decade as its industry seeks to cut carbon emissions by switching from coal to gas,” said Steve Hill, Executive Vice President for Shell Energy.

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“With China’s coal-based steel sector accounting for more emissions than the total emissions of the UK, Germany and Turkey combined, gas has an essential role to play in tackling one of the world’s biggest sources of carbon emissions and local air pollution,” he added.