Shell Forecasts 50% Growth in Global LNG Demand by 2040: “A Profitable Situation for Algeria”
BY: Dr. Hana Saada
ALGIERS- According to the latest report by the British oil company Shell, Algeria, Qatar, and Saudi Arabia are poised to become the most significant players in the global LNG market over the next 16 years. The report forecasts a 50% growth in LNG demand by 2040, primarily driven by increasing demand from China, Europe, and Africa.
With regards to the European demand, which traditionally represents a key market for Algeria, the report highlights Algeria’s continuous expansion in the market, especially following recent contracts such as the agreement with the British company Grain LNG for the delivery of 3 million tons starting from 2029. Shell’s document predicts a substantial surge in demand for LNG from Europe starting around 2030.
The report notes that the long-term LNG contracts Europe has signed thus far will not be sufficient to bridge the gap between supply and demand for the remainder of the decade. There is projected to be a structural shortage of 50 to 70 million metric tons per year for the rest of the decade, which Europe must address.
Shell suggests that this scenario bodes well for Algeria, Qatar, and Australia, all of which are significant LNG exporters. This is attributed to uncertainties surrounding American investment in the continued development of the LNG sector.
To meet the increasing demand in the global LNG market, Algeria has been proactive in developing its port infrastructure, particularly at Skikda, the country’s largest LNG port. This development aims to facilitate the loading of large LNG carriers with a transportation capacity of 220,000 m³, while emphasizing the central importance of the production sector.
Algeria’s strategic focus on LNG development not only enables the country to fulfill its international commitments but also expands the client portfolio of its national hydrocarbon company, Sonatrach. The recent contract with Grain NLG is a testament to Algeria’s commitment to enhancing its LNG exports, which surpassed 13 million tons for the first time since 2010.
Looking ahead, Algeria aims to further improve its LNG exports by directing efforts towards gas production development. The country’s LNG has become highly sought-after in recent years, particularly in the European market, thanks to its availability and geographic proximity.
Algeria’s ability to provide significant volumes of LNG with precise delivery times has positioned it favorably compared to other suppliers, mitigating risks associated with shipping distances and geopolitical disruptions. These factors, coupled with the trend of European countries establishing regasification plants to reduce reliance on Russian gas imports by 2028, have enabled Algeria to reclaim its position as the leading LNG exporter in Africa, surpassing Nigeria.
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