What's still challenging Southeast Asia's LNG plans

The region’s LNG import infrastructure investments are expected to cost $11.8b.

Geopolitical tensions and price pressures are still challenging Southeast Asia's liquefied natural gas (LNG) supply, casting uncertainty over the region's energy goals.

In a new report, international research group Zero Carbon Analytics (ZCA) noted that Southeast Asia plans to import more LNG to strengthen energy security and to provide a strategic fix amidst tariff pressures from the US.

However, ongoing geopolitical problems could raise issues on affordability despite the impending LNG supply surge. This could also be fuelled by the Israel-Iran conflict, where analysts warn that any disruption to the Strait of Hormuz will also impact Southeast Asia.

“In recent years, LNG imports have contributed to significant electricity price increases in countries like Thailand and Singapore, and supply disruptions have occurred due to global market reallocation, particularly during periods of heightened European demand,” said Dario Kenner, energy Transition Researcher at ZCA.

“The region’s investments in LNG infrastructure come with exposure to continued price volatility, dollar-denominated costs, and potential supply constraints,” he added.

ZCA estimates Southeast Asia’s LNG import infrastructure investments will cost $11.8b. This could lead to decades of fuel shocks and price instability due to global market volatility and political disruptions.

The region’s demand for LNG for energy security is driven partly by the impending growth in global supplies, which is projected to increase as the US and Qatar expand their export infrastructure.

The International Energy Agency estimates cumulative liquefaction export capacity will grow by 33% between 2024 and 2028, from 665 billion cubic metres (bcm) per year to 884 bcm per year.