Southeast Asia presses ahead with $160b gas buildout

Hormuz disruptions exposed supply risks despite a planned 70-mtpa LNG capacity.

More than $160b worth of gas-fired power and liquefied natural gas (LNG) import capacity remains in development across Southeast Asia as disruption in the Strait of Hormuz exposes the region’s reliance on imported gas, according to Global Energy Monitor (GEM).

More than 100 gigawatts (GW) of gas-fired power capacity remains in development across the region, with roughly 106 GW still planned, despite projects entering and leaving the pipeline since May 2024.

Planned LNG import capacity has also increased to about 70 million tonnes per annum (mtpa), from about 47 mtpa in 2024.

GEM said the expansion of LNG import infrastructure could increase Southeast Asia’s exposure to supply disruptions and price volatility as the conflict in the Strait of Hormuz affects LNG supplies and pushes up prices.

“The conflict in the Strait of Hormuz is stress-testing Southeast Asia’s plans for gas expansion, but its effects are not playing out uniformly across the region,” said Warda Ajaz, Project Manager of the Asia Gas Tracker at GEM.

Ajaz added that whilst some countries appear to be moving away from gas, others are pressing ahead with gas expansion.

She said the conflict has not resulted in a fundamental change in Southeast Asia’s infrastructure trajectory, but has exposed risks in the assumptions supporting the region’s gas expansion.

“Import capacity does not guarantee secure LNG supply, access to LNG does not guarantee affordability, and domestic gas provides a meaningful buffer only where sufficient supply is already available,” she said.

GEM identified at least 20 domestic gas fields that could add about 62 billion cubic metres per year of production capacity by 2035.

However, new domestic gas supply can take years to develop and may not supply domestic power markets, limiting its role as a short-term alternative to imported LNG.