Fueling Progress: Southeast Asia’s LNG Market and Japan’s Strategic Inroads

May 23, 2023|Southeast Asia LNG

Southeast Asia is forecasted by the IMF to be the world’s fastest-growing region this year. That economic development, however, can only succeed and be sustained if there’s a substantial increase in energy supplies.

Traditionally, most Southeast Asian nations have relied heavily on coal to fuel industry and meet household needs, but amid growing global concern over greenhouse gas emissions, the region is considering other alternatives. While the small presence of renewables is expanding in Southeast Asia, it’s likely that for the foreseeable future natural gas will be the region’s fuel of choice.

In 2020, Southeast Asia accounted for about 6% of global LNG demand, and this is expected to grow to around 11% by 2030, according to the latest G2M2 database. Natural gas is mostly used for industry and power generation in Southeast Asia, and this will continue to drive demand growth. Residential and commercial use is limited because of poorly developed infrastructure and a lower demand for heating due to a subtropical climate.

In an effort to discern future growth traits and trends for natural gas demand in Southeast Asia, this market analysis focuses on Thailand, Malaysia, Singapore, Indonesia, Vietnam, Myanmar, and Philippines. Domestic gas production among these seven countries is expected to decrease, and LNG will likely become the main energy source powering growth.

The total gas consumption of the seven countries through 2030 is predicted to increase 37%, to around 60 BCM of growth in consumption and 78 BCM of growth in LNG imports, with an average annual growth rate of 4% and 12%, respectively. However, most of these countries are new to the LNG market. Japan is a leading force supporting natural gas growth in the region and it’s the main country outside Southeast Asia that’s set to benefit.

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