Southeast Asia ramps up LNG import capacity

Southeast Asia is leaning into LNG use despite the risk of external shocks a new report published on September 24 by US think tank Global Energy Monitor (GEM) revealed.

Despite sky-high Asian LNG prices on the spot market stemming from the Middle East conflict and QatarEnergy declaring force majeure through to mid-October on deliveries of LNG cargoes to some of its Asian buyers, Asian countries continue to build up LNG import capacity.

Asian LNG prices on the spot market hit a five-month high in early September. Nevertheless, countries have shown no signs of backing away from earlier plans to increase imports of the super-chilled fuel.

LNG import capacity in Southeast has seen extraordinary growth in recent years, jumping from 47mn tonnes per year (tpy) in 2024 to about 70mn tpy currently. Meanwhile, Southeast Asia is also developing over 100 GW of gas-fired power generation capacity.

Enormous capital expenditure is being made by the region with GEM committing an investment of $160bn for its current pipeline of import terminal and LNG power generation projects.

However, despite the embrace of LNG imports by Southeast Asia, it has not all been smooth sailing. GEM data reveals that development of 65mn tpy of LNG import capacity has been paused or cancelled, highlighting that the investment environment remains choppy.

Nevertheless, Vietnam recently doubled-down on LNG imports, with state-run PV Gas approaching potential suppliers in September for a five-year contract covering 250,000-450,000 tpy of LNG with deliveries requested to begin in January.

Meanwhile, the Philippines also held talks with Malaysia’s Petronas in mid-September as Manila pushes ahead to reduce reliance on coal-fired generation, which still dominates the country's power mix. The Philippines has already bought a number of LNG cargoes on the spot market from Petronas’ export terminal in Bintulu, Sarawak.