Business
Big Oil Doubles Down on LNG Amid Growing Global Demand

Demand for liquefied natural gas (LNG) is rising, defying earlier predictions that the energy transition would diminish the need for hydrocarbons. As the world increasingly turns to renewable energy sources, major oil companies are doubling down on their natural gas operations, a move that has drawn criticism from advocates of the transition to cleaner energy.
Recent quarterly reports from leading oil companies highlight the growing significance of their LNG businesses. According to CNBC’s Sam Meredith, firms like Shell, TotalEnergies, BP, Exxon, and Chevron are prioritizing LNG, anticipating that demand will continue to rise. Notably, Shell announced plans to increase its LNG capacity by 12 million tons by 2030, while TotalEnergies aims to boost its LNG volumes under management by 50% by 2030.
Future Projections and Industry Dynamics
While some forecasts suggest that natural gas demand might peak before 2030, the International Energy Agency (IEA) recently indicated that global demand for LNG is projected to grow. The IEA’s report noted that demand growth is expected to accelerate starting in 2026, with LNG supply set to rise by 7%, or 40 billion cubic meters (bcm), marking the largest increase since 2019. This growth is attributed to new projects coming online in the United States, Canada, and Qatar.
Despite the rapid development of wind and solar energy, demand for natural gas remains robust. Data from the first quarter of 2024 revealed a 3.4% increase in carbon dioxide emissions within the European Union, coinciding with a 1.2% growth in the bloc’s economy. This uptick is largely due to increased electricity generation from coal and gas, as wind and solar resources fell short of expectations.
The implications of this trend for Big Oil are significant. The energy sector is increasingly aware that, in the face of rising electricity demand—partly driven by artificial intelligence technologies—traditional energy sources will still play a critical role. The International Monetary Fund reported that electricity consumption by data centers could match that of India by 2030, surpassing the anticipated electricity use from electric vehicles.
The Role of Natural Gas in the Energy Transition
The push for renewables has not eliminated the need for dispatchable electricity, which can be generated on demand. Natural gas plants, along with coal and nuclear facilities, provide this essential service. Critics argue that continued reliance on natural gas undermines the goals of the energy transition, yet the European emissions data suggests that current realities are challenging these aspirations.
As the energy landscape evolves, it may be necessary to reassess transition goals to better reflect actual demand and supply dynamics. The ongoing investment in LNG by major oil companies indicates a belief that natural gas will remain a vital component of the global energy mix for the foreseeable future, despite the challenges posed by climate change and the push for cleaner energy sources.
The situation underscores a complex relationship between energy transition ambitions and the practicalities of meeting global energy needs. As the world continues to navigate these challenges, the future of LNG and its role in the energy transition will remain a critical topic of discussion among policymakers and industry leaders alike.
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