Shell LNG Series: The future of LNG is not so bright

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Executive Summary

Shell plc continues to bet on a future where LNG plays a major role in the energy mix. Our analysis suggests that, as the world decarbonises, the future of LNG is not so bright.

Already the world’s largest LNG trader, Shell’s growth strategy is underpinned by its forecasts of a 65% increase in global LNG demand by 2050, driven largely by emerging Asian markets.

Many investors see a different possible future for LNG, where its role in the energy mix diminishes as it is outcompeted by other sources of energy.

In 2025, shareholders representing a fifth of votes cast at the AGM asked the company to explain the assumptions that underpin the LNG demand forecast, and how these were consistent with the company's climate commitments.^[1]

Shell responded to investors via its Strategic Spotlight.^[2] The company expects that LNG demand will grow substantially to 2050, owing to its status as a “versatile, flexible and reliable” fuel,^[3] and believes its portfolio is well positioned to capitalise upon that growth.

In this series, we assess the key assumptions supporting Shell's Strategic Spotlight and LNG Outlook^[4] - examining LNG's role through the energy transition, its cost competitiveness, and the implications of changing approaches to energy security.

As the global energy system electrifies, can Shell count on strong LNG growth and lasting returns from its LNG business? Our analysis suggests it cannot.

Part 1: LNG's role in the power sector is diminishing

ACCR tests Shell's view of LNG as a balancing fuel. Across 36 gas-importing countries, renewables replaced both coal and gas in aggregate, 2019–2025.

Read the full investor bulletin here.

Part 2: LNG is increasingly uncompetitive

ACCR tests LNG's cost competitiveness in Shell's growth markets. In four of them, replacing domestic gas with LNG would raise gas costs around 500%.

Read the full investor bulletin here.

Part 3: Energy security favours reduced LNG dependence

ACCR tests Shell's energy security case for LNG. Supply shocks are pushing Pakistan, Vietnam and Thailand towards renewables.

Read the full investor bulletin here.