LONDON, 30 September 2025 — In a candid remark signaling growing caution over the liquefied natural gas (LNG) boom, Shell’s Chief Executive Officer Wael Sawan said he was “surprised” by the sheer scale of new LNG projects being sanctioned globally. He flagged the possibility of overcapacity and underscored the importance of discipline amid accelerating gas exuberance.
Speaking at an energy industry forum, Sawan reflected on the wave of investment across LNG projects, some of which may be overly optimistic. “The number of new LNG projects approved is a surprise to me,” he said. “We have to be careful. Growth should be measured and matched to demand, not just capacity expansion for its own sake.”
Why the Surprise?
Shell and its peers have embarked on an aggressive push to expand LNG capacity, betting on continued demand growth from Asia, climate transition needs, and displacement of coal. However, Sawan’s remark is a reminder that infrastructure lead times are long, capital intensity is high, and misaligned assumptions can lead to stranded assets.
He suggested that current dynamics reflect a momentum-driven rush by developers and financiers, and cautioned that not all of these projects will survive pressure from price cycles, regulatory change, and demand volatility. Instead, he called for greater capex discipline and alignment with more conservative demand forecasts.
Shell, which already trades large volumes of LNG globally, is positioning itself to benefit—but the CEO’s comments hint at introspection as much as ambition.
Strategic and Investor Implications
From an investor perspective, Sawan’s surprise underscores a key tension: the race to capture future LNG demand versus the risk of overbuilding. For energy portfolios, this view ratchets up the importance of:
- Asset selection and differentiation: Investors will favor LNG projects backed by final investment decisions (FIDs), strong offtakers, or embedded in integrated portfolios.
- Risk weighting capacity growth: Overcapacity can erode margins, especially in commoditised markets or where spot pricing dominates.
- Balance between boldness and restraint: Shell’s own ability to modulate spending and avoid excessive leverage will be scrutinised.
- Climate and regulatory stress testing: With tighter emissions rules and shifting demand curves, new LNG projects must be resilient under long-term decarbonisation assumptions.
Shell’s revelation of surprise is perhaps a subtle signal to markets—it is growing rapidly in gas but not blind to the perils of overreach. For investors, it’s a moment to assess how well Shell and its peers balance ambition with realism.
