Southeast Asia to Drive LNG Demand by 2030
Industry experts predict that Southeast Asian countries will play a crucial role in driving the demand for liquefied natural gas (LNG) by 2030. The global trade in LNG reached a record high in 2022, largely due to increased demand from Europe as the region reduces its reliance on Russian pipelines following the invasion of Ukraine by Moscow. However, Europe’s demand for LNG is expected to decline in the coming years.
Tony Regan, the Asia-Pacific gas lead at NexantECA, an energy and refining advisory firm, anticipates that LNG demand from Europe will peak in 2027 and decline by 2030. According to Regan, the real growth in demand will be seen in Southeast Asia, particularly in Vietnam, Thailand, and Indonesia.
Vietnam’s Bright Future in the LNG Market
Vietnam is expected to be a significant driver of LNG market growth in the coming years. Regan attributes this to Vietnam’s Power Development Plan 8, which mandates the conversion or retirement of all coal plants by 2050. As a result, Vietnam is projected to experience strong growth in LNG demand as many of the proposed power plants in the plan will be LNG or gas-fired.
By 2033, Southeast Asia’s LNG demand is forecasted to reach 73 million tons per year, accounting for 12% of the global LNG market. This represents nearly a fourfold increase compared to 2022.
Zhi Xin Chong
S&P Global’s Head of Emerging Asia’s Gas and LNG markets
Columbia University’s Center on Global Energy Policy recognizes Vietnam as an important market for LNG growth due to its strong economic and population growth. Vietnam’s GDP is expected to surge from $327 billion in 2022 to $760 billion by 2030, according to S&P Global estimates.
Southeast Asia’s Growing Potential in the Global LNG Market
According to analysis and consulting firm Mordor Intelligence, the global LNG market is projected to grow from $74.60 billion in 2023 to $103.41 billion by 2028. Energy giant Shell also highlights the tremendous growth in the LNG market, with Germany, Vietnam, and the Philippines identified as pivotal drivers of this growth. Shell’s executive vice president for Shell Energy, Steve Hill, emphasizes the progress made in implementing LNG imports in these countries.
S&P Global shares the optimism that Southeast Asia will become a prime market for LNG. Zhi Xin Chong, S&P Global’s head of Emerging Asia’s gas and LNG markets, predicts that Southeast Asia’s LNG demand will reach 73 million tons per year by 2033, representing 12% of the global LNG market. The main drivers of this growth are the declining domestic gas supply and the shift from coal to gas in the power sector. However, Chong cautions that stable prices and sufficient global funding for infrastructure development are crucial for sustaining this demand.
