Emerging Markets in Southeast Asia Anticipated to Fuel Significant Growth in LNG Sector by 2030

Southeast Asian countries are anticipated to emerge as major contributors to the LNG market by 2030, according to industry experts. The global trade in liquefied natural gas documented a record surge in 2022, primarily driven by soaring demand from Europe, as the region reduces its reliance on Russian pipelines after the invasion of Ukraine by Moscow. However, Europe’s demand for LNG is projected to decline in the coming years.

Tony Regan, Asia-Pacific gas lead at energy and refinery advisory firm NexantECA, predicts that LNG demand from Europe will reach its peak in 2027 and subsequently decline by 2030.

“The real action is going to be in Southeast Asia, particularly in Vietnam, Thailand, and Indonesia,” Regan commented.

Vietnam, in particular, is expected to be a significant growth area for the LNG market due to its government’s Power Development Plan 8, which aims to convert or retire all coal power plants by 2050. This plan is projected to drive strong demand for LNG in Vietnam over the next few years.

Vietnam has long been considered a key player in the LNG market due to its strong economic growth and population expansion, as highlighted by Columbia University’s Center on Global Energy Policy. The country’s GDP is forecasted to surge from $327 billion in 2022 to $760 billion by 2030, according to S&P Global estimates.

Research and consulting firm Mordor Intelligence projects that the global LNG market will grow from $74.60 billion in 2023 to $103.41 billion by 2028.

Shell, a major energy company, has witnessed remarkable growth in the LNG market over the past two months and has identified Germany, Vietnam, and the Philippines as promising markets for LNG.

“These markets have successfully implemented LNG imports and now possess great growth potential,” said Steve Hill, executive vice president for Shell Energy.

S&P Global shares the optimistic outlook for Southeast Asia, considering it a prime market for LNG natural gas.

“By 2033, Southeast Asia LNG demand is projected to reach 73 million tons per year, accounting for 12% of the global LNG market,” stated Zhi Xin Chong, Head of Emerging Asia’s Gas and LNG markets at S&P Global. This represents a nearly fourfold increase compared to 2022, driven by the continued decline in domestic gas supply and the shift from coal to gas in the power sector. The largest markets in the region are expected to be Thailand, Malaysia, Indonesia, and Singapore, as these countries have been importing LNG for several years. However, the demand in these markets remains fragile and dependent on stable prices and sufficient funding for infrastructure development.