- Geopolitical tensions, rising costs and equipment shortages have stalled several LNG power projects across emerging Asia.
- Wood Mackenzie expects only 14.9 GW of Southeast Asia’s planned 53 GW gas-fired power capacity to come online by 2030.
LNG Projects Face Delays Across Southeast Asia
Emerging Asian economies are reconsidering liquefied natural gas (LNG) investments as geopolitical shocks, equipment shortages and cheaper renewable energy undermine plans to expand gas-fired power generation.
Countries such as Vietnam and the Philippines had planned LNG import terminals and gas-fired power plants to meet rising electricity demand and reduce coal dependence. However, price increases following Russia’s 2022 invasion of Ukraine and the ongoing US-Iran conflict have exposed the risks of relying on imported gas.
Several projects have stalled, while others have fallen behind schedule. A global shortage of gas turbines has further complicated construction plans.
Renewables Gain Ground as Gas Projects Stall
Falling renewable energy costs have encouraged governments to accelerate solar and wind deployment. The International Energy Agency projected that wind and solar would account for 11% of Southeast Asia’s energy mix by 2030, up from 5% in 2025.
Wei Han Tan, Southeast Asia power and renewables analyst at Wood Mackenzie, said mounting delays and supply chain constraints were forcing policymakers to reconsider gas investments.
“Countries will need to look elsewhere to meet rising demand,” Tan said. He pointed to expanding existing coal-fired power capacity and accelerating renewable energy deployment as possible alternatives.
Wood Mackenzie estimates that just 14.9 GW of the region’s planned 53 GW gas-fired power pipeline will enter operation by 2030. Vietnam faces the largest shortfall, with 25.7 GW of planned projects unlikely to start by that deadline.
Fuel Price Volatility Reshapes Energy Strategies
Gas-fired power generation had already lost ground in several emerging Asian markets before the latest geopolitical tensions. Energy think tank Ember found that gas-fired electricity output declined in Bangladesh, Pakistan and India over the past five years as coal and renewables expanded.
In Southeast Asia, gas generation has remained relatively stable over the past decade. However, renewables have steadily reduced its share of the electricity mix.
Since the US-Israeli war on Iran began on February 28, several countries have accelerated plans for alternative energy sources. Bangladesh and Thailand announced solar expansion plans, while Vietnam considered increasing coal-fired generation.
Thailand imports about one-fifth of its LNG from Qatar. The country must secure alternative short-term supplies while accelerating its longer-term energy transition, its energy minister told Reuters last month.
Philippines LNG Projects Encounter Setbacks
The Philippines has also experienced delays in LNG-related developments. At least three projects have stalled over the past two years, while households have increasingly adopted rooftop solar to offset high electricity prices.
Energy World Corp sold a gas turbine intended for its power plant for nearly four times its purchase price from a decade earlier. The company cited rapid renewable energy growth as a factor reducing the need for gas-fired generation. It plans to develop the site as an LNG import terminal, according to its website.
Irtiza Sayyed, chief executive of JERA Global Energy Solutions, said power infrastructure development in emerging economies had slowed as projects competed with data centres for gas turbines. JERA, Japan’s largest power generator, is seeking to sell LNG across South and Southeast Asia.
LNG Demand Could Still Increase
Despite these setbacks, emerging Asia will likely consume more LNG as economies grow and domestic gas production declines. Wood Mackenzie forecasts that Southeast Asian LNG consumption will rise from 27 million metric tonnes in 2025 to 39 million tonnes by 2028.
Supporters of gas-fired generation argue that LNG can improve grid reliability and provide flexible power when renewable output fluctuates. Growing data centre capacity could also increase electricity demand and support gas consumption.
However, persistent price uncertainty is pushing governments to reconsider long-term investment plans. Lu Ming Pang, an analyst at Rystad Energy, said countries would likely turn to additional renewable energy as they plan for the next decade.
Rystad Energy has reduced its long-term Asian LNG demand forecasts by 3% for 2040 and 7% for 2045. The revisions reflect insufficient LNG supply agreements and infrastructure in countries such as Vietnam and the Philippines, alongside China’s accelerating renewable energy expansion.
The outlook suggests that LNG will remain part of Asia’s energy mix, but project delays, fuel price volatility and renewable energy growth could limit its role in meeting the region’s future electricity demand.