The world could be consuming more gas than oil by 2025, and to prepare, Royal Dutch/Shell Group is expanding its reach to serve the higher demand in the United States and Asia through liquefied natural gas (LNG) imports, according to Sir Philip Watts, chairman of Shell’s committee of managing directors.

Speaking at the World Gas Conference in Tokyo on Tuesday, Watts said Shell is moving aggressively to establish itself where the growth is expected, and LNG is expected to play a large role for its U.S. operations into the future.

“We believe this fuel (LNG) will play an increasingly important role in energy supplies and are determined to retain our leadership,” said Watts. In the United States, “rising demand and limited potential to raise domestic supply…mean an increasing role for imports, particularly LNG.”

Watts said LNG supplies “will be attracted by current higher prices and the size, flexibility and liquidity of the U.S. market. New access points are important.” However, expansion of the four existing U.S. LNG terminals “could provide 30 million tonnes per annum of capacity, a quarter of present worldwide sales.”

Currently, Shell has begun securing import capacity in both the United States and Mexico, said Watts, for both Atlantic and Pacific supplies, “as well as pursuing the potential for an offshore terminal in the Gulf of Mexico.”

As to whether a global spot market could develop for LNG, Watts said he has “no doubt” that “major infrastructure developments will continue to be based on long-term contracts for the foreseeable future.”

Linda Cook, CEO of Gas and Power for Shell, added that LNG demand “has tremendous growth potential.” She said that over the next 10 years, Shell expects global demand for LNG to “more than double,” growing at a higher rate “than that of oil or even pipeline gas.”

New LNG markets would open up new demand, she said, but present “challenging new customer requirements, including shorter-term contracts, increased contract volume and seasonal flexibility, increased spot trading and even the possibility of flat-priced offerings.”

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