HOUSTON – The voracious energy appetite of Asian markets - including developing countries within Southeast Asia - will gobble up liquefied natural gas (LNG) supply between now and onward to 2040, according to Shell CEO Wael Sawan.

Speaking at the ongoing CERAWeek by S&P Global here, he emphasized that “there will be a huge demand for off-take (volume purchases) in places like India and places like Southeast Asia and China.”

The LNG shifts of many Asian countries, he said, are anchored on multiplicity of factors – including replacement for the vast coal fleets of many countries in the region; then as ‘flexible generation’ to backstop  the intermittent nature of renewables and as reinforcement to the overall energy security and energy transition goals of these energy markets; plus bridging the gap on the disrupted gas supply to Europe due to the interminable Russia-Ukraine war.

“We see a lot of that growth coming in particular in Asia – whether it is the coal-to-gas switching or in certain countries like Vietnam, Bangladesh and others for the current infrastructure because of domestic production in the past. As those reserves started to decline, LNG can allow those countries to fully utilize the infrastructure while bringing in LNG,” he stressed.

Relative to the energy transition pathways that have also been driving the energy future of these Asian countries, Sawan conveyed “we continue to see the complementarity of LNG with the intermittent nature of the grid as we move toward more and more renewable generation.”

He expounded “at the end of the day, the real intent here is to be able to bring that multi-dimensional nature of the energy transition and move this dialogue that seems to fixate: is it oil and gas or is it solar and wind? It’s all - and we need them in abundance.”

Taking cue from recent developments across markets, the Shell chief executive reiterated that “LNG will continue to have a strong growth. Today, we have 13% of the overall gas sales – we see it growing around 20% in the coming 15 to 20 years.”

Moving forward to 2040, Sawan highlighted that the LNG demand acceleration may even go beyond 50% from current levels.

On the supply side, he specified that at least two giant gas players – United States and Qatar – will be the key producers that will be quenching the LNG thirst of markets.

“Roughly 50% plus growth against the levels where we are today – anywhere between 650 to 700 million tonnes per annum by then (2040). You'll have supply coming out of the United States; and supply coming out of Qatar. These are the two big giants in that space for now,” he noted.

Sawan, nevertheless, acknowledged that the disturbing precept to the projected LNG demand escalation will be the price points, with him specifying that the growth momentum will be sustained depending on cost swings -- especially with any portended impact of the decision of the US to ‘pause’ on any expansion for its LNG exports.  

“The key point will be on the prices of LNG of course…and you see, as gas prices have come below $10 over the last few weeks, you can see the huge pickup in demand again by price sensitive customers and we’re starting to see that floor very quickly to establish itself,” he stated.

In Shell’s case, he indicated that the continuing trajectory will be to grow across the supply chain of its businesses; all that while also pursuing strategies to concretize its 2050 net zero goal; and to deliver on its committed level of emissions reduction by 2030.