Natural Gas Demand Defies Predictions, Big Oil Doubles Down on LNG Business.

Big Oil companies are doubling down on their liquefied natural gas (LNG) business despite predictions of declining demand. LNG demand is expected to continue growing, driven by increased electricity demand, according to the International Energy Agency. The supermajors, including Shell, TotalEnergies, BP, Exxon, and Chevron, are planning to expand their LNG capacity and volumes under management, with some targeting a 50% increase by 2030.

Despite predictions of declining demand, major oil companies are doubling down on their liquefied natural gas (LNG) business. This shift is driven by the International Energy Agency's (IEA) forecast that global electricity demand will continue to grow, with LNG expected to play a significant role [1].

Shell, TotalEnergies, BP, ExxonMobil, and Chevron are among the supermajors expanding their LNG capacities and volumes under management. Shell plans to add 12 million tons of LNG capacity by 2030, while TotalEnergies aims to increase its LNG volumes under management by 50% over the same period [1]. BP has started a new LNG project in Senegal and Mauritania, targeting the region as a major LNG hub [1]. ExxonMobil is eyeing a 50% increase in its LNG assets by 2030, and Chevron is planning a global expansion in its LNG operations [1].

Chevron's LNG business is a key part of its strategy, anchored by the Gorgon and Wheatstone projects in Australia, which provide a reliable supply of LNG to the strong global market, particularly in Asia [2]. Chevron's LNG operations are focused on efficiency and productivity, with a strong environmental focus, including the world’s largest carbon capture and storage (CCS) system at the Gorgon Project [2].

ExxonMobil and Chevron are also prioritizing LNG as a growth engine, linking it closely to the rising demand from emerging markets. Shell, with its recent start-up of LNG Canada, is strategically positioned to capitalize on the rising worldwide demand for LNG [2].

The IEA's report sees global demand growth for LNG picking up again in 2026 and accelerating to around 2% by 2030, with a considerable increase in LNG supply easing market fundamentals and fostering stronger demand growth in Asia [1]. Despite the growth in wind and solar capacity, the massive growth in these renewable sources has not translated into much lower demand for natural gas in Europe [1].

This strategic focus on LNG by the supermajors reflects a balance between growth and sustainability, as these companies work to embed carbon-reduction technologies into their operations. The LNG sector's resilience and growth potential make it a key area of focus for investors and financial professionals.

References:
[1] https://sg.finance.yahoo.com/news/lng-demand-defies-gloomy-predictions-220000309.html
[2] https://www.nasdaq.com/articles/inside-chevrons-lng-push-gorgon-and-wheatstone-focus