The significantly higher demand for liquefied natural gas in Europe is set to intensify competition with Asia in the short term and to dominate LNG trade in the longer term, Shell said in its annual LNG outlook on Thursday.

European countries, including the UK, saw their LNG imports jump by 60% last year, to 121 million tons, Shell, the world’s largest LNG trader, said as it issued a bullish outlook on the fuel through 2040.

Global LNG trade hit 396 million tons last year, an increase of 16 million tons compared to 2021.

The surge in Europe’s imports in 2022 was facilitated by a marked drop in South Asia’s LNG imports due to the high prices, Shell said.

At the same time, Europe’s pipeline gas imports from the bigger producer slumped by 53% in 2022 compared to 2021.

LNG could become a core energy supply for Europe to meet energy security needs, while the biggest country in Asia could increasingly provide more flexibility to the global LNG market, the supermajor said.