Shell, the British energy major, projected that global demand for liquefied natural gas (LNG) will increase by up to 68% by 2040 compared with 2025. It forecast that LNG's share of seaborne energy trade will reach about 30% in 2050, roughly double today's level.
As seaborne LNG trade grows, demand for ships to carry it will also rise, leading analysts to say Korea's shipbuilders—who are countering Chinese yards' low-price push with selective orders focused on high-value LNG carriers—will see steady work.
◇"LNG market to expand 40% by 2030"
According to the energy industry on the 18th, Shell, in its LNG portfolio strategy report released on the 16th (local time), assessed that long-term demand growth will continue despite uncertainty from the Middle East war disrupting 20% of global LNG output.
The report said global LNG demand will rise from 422 million tons in 2025 to 650 million–710 million tons by 2040, and could reach up to 780 million tons in 2050. Shell said, "LNG is a key resource supporting the energy transition by replacing carbon-intensive fuels such as coal and oil."
It also predicted a shift in the landscape of seaborne energy trade. Today, crude oil and coal make up most energy shipped by sea, but LNG is expected to fill the gap as seaborne transport of those two fuels gradually declines. Shell projected LNG cargoes' share of seaborne energy trade will grow from the current 16% to about 30% by 2050.
This change in energy cargo transport structure will directly translate into more new orders for large LNG carriers. Wood Mackenzie, a U.K. shipping analytics firm, recently said in a report that more than 650 new LNG carriers will be needed by 2040 to handle new project volumes and replacement demand for aging vessels.
Shell said, "The LNG industry has entered the early stage of a new investment supercycle, and the market will expand 40% by 2030."
◇Korean Big 3 shipbuilders seize LNG market with specialized strategies
Keeping pace with this trend, Korea's shipbuilders are maximizing profitability by focusing on selective orders for large, high-value LNG carriers. Korea currently handles 66% of the global LNG carrier order backlog. Of the 296 large LNG carriers delivered over the five years from 2021 to 2025, Korea supplied 248, capturing an 83.8% share, while China delivered 48.
This year, Chinese shipyards' order volumes are increasing, but many are orders from domestic shipping companies. An HD Korea Shipbuilding & Offshore Engineering official said on a recent conference call, "LNG carriers built by China still lag Korean ships in quality and technology, and most of the orders are for China's domestic market," adding, "In major global orders such as those from Cheniere in the United States and the Mozambique Equinor project, Chinese shipbuilders continue to be excluded."
Korea's three shipbuilders plan to play to their strengths to meet LNG demand. Hanwha Ocean, leveraging its record of building 200 large LNG carriers—the most by a single yard worldwide—and its icebreaking technology, is focusing on orders for new gas fields in North America and elsewhere.
Samsung Heavy Industries ranks first in floating liquefied natural gas production facilities (FLNG)—which extract, liquefy, and store natural gas offshore in one process—by winning six out of every 10 units ordered worldwide. HD Hyundai-affiliated shipyards are advancing eco-friendly technologies such as dual-fuel engines while strengthening their position in the global LNG bunkering vessel (offshore fuel supply ship) market.
◇Excess supply risks offset by new demand from emerging economies
Excess LNG supply or project delays could become future variables. Shell analyzed that if large-scale new investments lead to a short-term glut, LNG prices could fall. If global gas field projects are delayed simultaneously by national policies or geopolitical factors, major ship order timelines could also be pushed back.
However, Shell said downward price pressure could instead become a new driver of LNG market expansion. If short-term oversupply pushes LNG prices down, price-sensitive developing countries will increase LNG imports in place of other fossil fuels.
Shell said, "In some regions such as Europe and Japan, gas consumption has already peaked, but new demand from emerging Asian economies will more than offset that," adding, "Global LNG demand is expected to continue growing even after 2040."