The world’s two biggest publicly listed liquefied natural gas (LNG) traders, Shell Plc and TotalEnergies SE, have sounded a note of caution about the uncertain timing of new global LNG projects, as escalating construction costs, financing constraints, and security challenges threaten to disrupt global supply expansion plans.
The warnings come amid a period of heightened volatility in the global energy market, where strong LNG demand—particularly from Asia and Europe—continues to clash with supply bottlenecks and economic headwinds.
During separate earnings calls on Thursday, both companies indicated that a combination of rising inflation, high-interest rates, and geopolitical factors, including sanctions and regional instability, have caused major LNG developments worldwide to experience significant delays.
Uncertain Timelines for LNG Expansion
Shell’s Chief Financial Officer, Sinead Gorman, told reporters that while new supply projects are in the pipeline, their actual completion dates remain uncertain.
“Supply growth on the horizon and those timings are uncertain. You’ve seen those move quite a few times between years,” Gorman said, following the release of Shell’s third-quarter results, which surpassed market expectations.
Her remarks reflect the growing frustration among global energy players as project timelines stretch further, complicating forecasts for future LNG output and price stability.
Many of these delays are tied to surging construction costs, largely driven by tariffs on materials, costlier logistics, and rising labor expenses. In the United States, LNG exporters have been renegotiating contracts to absorb the unexpected rise in costs, while projects in regions such as Mozambique continue to face setbacks due to persistent security concerns.
Financing Bottlenecks and Capital Strain
The International Energy Agency (IEA) anticipates a net addition of around 184 million metric tons per year (mtpa) of new LNG supply by 2030. Yet, both Shell and TotalEnergies warn that achieving this target may be difficult unless developers can secure affordable, long-term financing.
TotalEnergies CEO Patrick Pouyanné cautioned investors that many LNG developers are struggling to meet financing terms under current economic conditions.
“There are a lot of announcements, but all these projects will have to find financing — and good financing, not expensive, otherwise you destroy the value,” Pouyanné told analysts during the company’s quarterly results call.
He cited contrasting examples to illustrate his point: NextDecade Corp. managed to greenlight its Rio Grande LNG Train 4 due to a relatively competitive 6.5% financing rate, while Sempra Energy postponed the expansion of its Cameron LNG terminal due to surging capital expenditure.
Pouyanné also revealed that Total’s Papua LNG project is being redesigned to bring down costs, signaling a more cautious approach to large-scale investments amid global inflationary pressures.
Shell Predicts Balanced LNG Market by 2026
Despite near-term turbulence, Shell’s Chief Executive Officer Wael Sawan offered a more optimistic medium-term outlook. He projected that global LNG supply and demand will likely find equilibrium by 2026, even as the market grapples with project delays and cost overruns.
“We see a balanced LNG market by 2026,” Sawan said during a media briefing, adding that Shell remains bullish on long-term LNG demand due to its critical role in supporting global energy transition goals.
LNG remains a central pillar of many countries’ decarbonization strategies, offering a cleaner-burning alternative to coal and oil while supporting energy security amid the gradual shift to renewables. However, the recent slowdown in project execution could lead to tight market conditions and price volatility in the short term, analysts warn.
Geopolitics and Energy Transition at a Crossroads
Global energy experts say the interplay between geopolitics, financing constraints, and environmental policies could redefine the LNG investment landscape in the coming decade. The ongoing conflict in Ukraine, coupled with U.S. sanctions and trade tensions, has already reshaped global gas flows, with Europe increasingly turning to LNG imports to replace pipeline gas from Russia.
However, as the cost of capital rises and environmental regulations tighten, energy majors are finding it harder to commit to large, multi-decade LNG projects without government or institutional support.
According to analysts, this evolving dynamic will test the resilience of both producers and consumers, as well as the industry’s ability to balance profit motives with energy transition commitments.
The message from Shell and TotalEnergies is clear: the global LNG market is entering a new era of uncertainty. Rising costs, financing pressures, and geopolitical disruptions could delay the much-anticipated surge in new supply, even as demand continues to climb.
While industry leaders remain optimistic about the long-term prospects of LNG as a bridge fuel for the energy transition, the immediate challenge lies in delivering projects on time and within budget — a task that will define the next phase of the global gas market.
Shell and TotalEnergies warn that global LNG project timelines are increasingly uncertain due to rising costs, financing challenges, and geopolitical risks — a development that could reshape global energy supply and pricing in the years ahead.
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