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Woodside Energy Expects a 50% Increase in LNG Demand by 2034

Woodside Energy expects demand for liquefied natural gas to increase by 50% over the next ten years driven by Asia, Bloomberg has reported, citing chief executive Meg O’Neill.

“We’re seeing signs of that demand growth in emerging Asia,” O’Neill told the publication.

“There’ll be points in time where we’ll see a fair amount of new supply arriving, but the demand growth is really likely to absorb that over the course of the coming years,” she added.

In her comments, O’Neill echoes the forecast of fellow LNG major Shell, which earlier this month said it expected demand for the superchilled fuel to gain 50% by 2040, again citing strong demand from the emerging nations of Asia.

Despite the fact that demand for natural gas has peaked in some regions, Shell expects global demand to peak after 2040. This view on demand peak is more than 10 years further out in time compared to the most recent estimates by the International Energy Agency. The IEA sees demand for all hydrocarbons peaking before 2040.

Woodside, like Shell, is quite upbeat in its gas demand projections, saying gas will be needed to back up intermittent wind and solar over the long term. Germany recently provided proof for that: the Scholz government is building four new gas-powered plants for that reason, with the total price tag at $17 billion. The plants will be hydrogen-ready in case hydrogen becomes a viable alternative for gas in power generation.

With a view to this strong demand, Woodside continues to expand its gas operations and recently made an attempt to add an acquisition to its growth efforts. The company was in talks with local heavyweight Santos but the two failed to reach a deal that would be satisfactory to both. Had they ended successfully, the deal would have created an LNG giant in the Asia Pacific.

By Irina Slav for Oilprice.com

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