Shell’s recent forecast projected annual LNG demand to reach 700 million tons by 2050, representing a 65% increase over 2025 levels. However, the closure of the world’s largest liquefaction hub in Qatar has exposed the fragility of this outlook. Pat Breen, chief executive of Gas Strategies, noted that buyers who paid $10 per MMBtu in January faced costs of $22 per MMBtu by July. This price surge has triggered demand destruction, with nations like Japan—the world’s second-largest importer—restarting coal plants to mitigate costs.
Middle East Conflict Clouds Future of Global LNG Expansion
With LNG prices doubling since January, the ongoing conflict in the Middle East is challenging the long-term growth narrative of the superchilled fuel. As exports from the Persian Gulf stall, importers are increasingly pivoting back to coal, forcing a re-evaluation of energy security strategies heading toward 2050.
Global demand could contract by 8% this year if supply from the Persian Gulf remains constrained. While the U.S. and Australia are aggressively expanding liquefaction capacity, the persistent security threat in the Strait of Hormuz suggests that the current war premium will linger. Even as 207 million tons of new annual capacity are slated to come online by 2030, the market faces a fundamental uncertainty regarding long-term buyer appetite. Despite the push for renewables, the inherent reliability of gas for on-demand power generation remains its strongest defense against a permanent decline in market share.
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