Data centre growth to drive LNG demand, gas turbines in Southeast Asia

The region's data centre pipeline is expected to reach 9.4GW by 2035.

Data centre expansion is set to drive combined-cycle gas turbine (CCGT) development and liquefied natural gas (LNG) demand in Southeast Asia as the region’s pipeline more than triples to 9.4 gigawatts (GW) by 2035, according to Wood Mackenzie.

LNG demand in the region is expected to grow 16% annually through 2035 as data centre electricity demand rises to 57 terawatt-hours (TWh) from 17 TWh.

CCGTs are the most viable technology for meeting data centres’ 24/7 reliability requirements at scale, whilst grid-scale battery storage remains commercially immature across the region through the mid-2030s.

“What makes data centre demand interesting from an LNG perspective is the counterparty profile,” said Md Fadhlullah Omarali, Principal Analyst at Wood Mackenzie.

Omarali said data centres are “large, creditworthy off-takers” with power needs that remain stable regardless of economic cycles, changing the risk calculus for new supply into Southeast Asia.

Singapore, Malaysia, and Thailand are positioned to account for much of the LNG opportunity, Wood Mackenzie said.

Singapore’s grid runs on about 95% gas, meaning new data centre capacity is expected to translate into additional LNG demand.

“With piped imports from Malaysia and Indonesia expected to cease by the early 2030s, the city-state’s LNG reliance is on course to reach 100%,” the firm said.

Malaysia has 3.9 GW of data centre capacity under development, with new regasification terminals being built to meet growing power demand.

Thailand, where gas accounts for about two-thirds of the power grid, is expected to see LNG exceed 50% of its gas supply by 2035 as Gulf of Thailand production and Myanmar pipeline imports decline.

Indonesia’s Batam is also emerging as a third node in the Singapore-Johor-Riau corridor, with more than 450 MW of data centre capacity in the pipeline. Power deliverability remains a constraint, with grid reliability a concern at the scale of incoming demand.

“Malaysia and Thailand are at a turning point. Data centre investment is growing quickly just as domestic gas output peaks and declines,” Omarali said. “New import infrastructure is being developed and the importer base is broadening. For LNG suppliers with volumes to place, this timing is important.”

The outlook differs in South Asia, where India’s data centre market is expected to grow fivefold to nearly 12 GW by 2035.

Wood Mackenzie said LNG is unlikely to capture this growth because LNG-to-power generation costs two to three times more than renewables paired with battery storage in India.

Gas accounts for less than 2% of India’s power generation mix and is forecast to remain at that level through the outlook period, with coal and renewables continuing to dominate.

“Pipeline infrastructure gaps across key data centre corridors in southern, central and eastern India add a further barrier to gas penetration,” it said.

No Indian hyperscaler has announced a gas-backed power supply agreement, whilst commercial and industrial renewable power purchase agreements have exceeded 33 GW of contracted data centre capacity.

Pakistan and Bangladesh face further constraints from persistent load-shedding, grid instability, and macroeconomic pressures, limiting data centre demand and deterring hyperscale investment.