The LNG-focused nations of southeast Asia are pursuing different aspects of the market, but all involve hefty government involvement. Vietnam seeks to invest as a major consumer as it develops its LNG-to-power schemes. Indonesia continues to invest in exploration and development as an ongoing supplier, both for its own sake and for valuable exports.

Malaysia seeks to invest and stabilise its domestic gas market. Singapore is becoming increasingly reliant on LNG to decarbonise its power industry. The Philippines is significantly investing into LNG as the Malampaya gas field depletes. And of course, Brunei remains a producer reliant on LNG for wealth even as it begins to look ahead to its declining reserves.

The growth of LNG as a power source for the region has begun to take off. The cost of LNG has been a steep barrier for most of the region to overcome. Indonesia led the way largely out of necessity, given their island bound geography. LNG consumption in the region has begun to take off as efforts to decarbonise industry compete with the need for more energy.

Vietnam

Vietnam and the Philippines are the new kids on the block. Vietnam is looking to transition to a gas-fired energy grid, moving away from coal to a lower-pollution fuel, driven by its stated Nationally Determined Contributions to climate change, reductions of 9% by 2030. The plan’s keystone is the LNG-to-Power plants outlined in Power Development Plan (PDP) 8.

Energy security has also become a key focus for the Vietnamese government. In 2020, announcements targeting 5.6Mtpa of actual LNG imports by 2030 and 10Mtpa by 2045 were announced by the Politburo. Initial LNG imports target the latter half of 2023.

Despite PDP8 establishing plans for 22GW of gas-fired power, the dramatic increase in demand over 2022 has sabotaged the project’s potential. High LNG prices have caused the government to call for a review of the feasibility of gas-fired power projects. Hanoi may consider offshore wind as the primary alternative if LNG remains expensive, but a minimum of three power plants will proceed with coal-to-LNG switching.

The nation’s commitments to net zero by 2050 encourages a greater investment in renewables at the cost of the two new potential LNG facilities. The tentative plan to burn hydrogen after 2030 to mitigate emissions is holding the planned LNG-fired power projects in place for now. 3500MW of gas-fired plants are due to come online by 2025, an estimated 2Mt of imports that year, with an additional 21GW to come online by 2030.

Philippines

The Philippines’ National Oil Company has recently granted approval to a seventh LNG facility, though imports are far from capacity due to the nation’s current low power requirements. The move has been spurred by declining output from the Malampaya gas field in the South China Sea, expected to become depleted as soon as 2027.

The end of the March quarter will see the completion of First Gen’s Batangas LNG terminal, which is intended to host a 5.3Mtpa FSRU vessel while onshore construction finishes. Combined with the upcoming start of the completed 3Mtpa Philippines LNG, the Filipino LNG import capacity has rapidly expanded. The other approved projects remain smaller, around 0.2-0.5Mtpa capacity each.

Indonesia

Indonesia will remain self-sufficient and a strong regional contributor to the LNG market. Steady investment in exploration and development have kept Indonesia’s energy mix diverse despite the abundant cheap coal resources made available over the last decade. Gas use contributes around 20% of electricity production in 2022, expected to grow to 21% in 2025, before gas and coal slowly lose ground to renewables. By 2030, gas is expected to contribute 18% of electricity generation.

Indonesia’s LNG imports are almost entirely self-managed, provided from the nation’s three key LNG terminals. While Pertamina’s Bontang LNG is in decline due to age and falling gas supply, the upcoming 3.8Mtpa expansion at Tangguh LNG and the government’s continued investment will maintain the nation’s production levels.

Indonesia’s key production growth is the long-delayed 9.5Mtpa Abadi LNG project, processing gas from the Masela Block. The project has been in limbo for over a decade, and Inpex recently confirmed its intent to delay FID into the latter half of the decade. Meanwhile, Shell is desperately trying to offload its 35% stake onto state-owned Pertamina, more than two years after Shell’s announced exit from the project.

Indonesia will have 2Mtpa of contracts expire in 2024 at Tangguh LNG and Bontang LNG, and another 2Mtpa in 2028 at Donggi-Senoro LNG, freeing up additional production for domestic use. This gas will be partially used domestically as Indonesian demand grows, but at least 2Mtpa will be recontracted.

Malaysia

Malaysia’s gas use for electrical power generation will peak next year in 2024. Increasing shares of gas will be committed to domestic use as domestic fields decline. Bintulu LNG, otherwise known as Malaysia LNG, has been in long-term decline as a result. Field development will be unable to compensate for losses in gas supply, and new field discoveries have a host of technical and compositional issues that will increase processing cost.

Estimates of the 92bcm Kasawari discovery, slated to start later this year after the CCS project reached FID in 2022, suggest it holds up to 35% CO₂ content. The CCS project is expected to capture up to 3.3Mtpa of CO₂-e. Other fields have similar issues, with estimates of high CO₂ and sulfur content common, which Bintulu LNG has not been technically designed for.

Petronas has prioritised sweet gas field development for feed gas to Bintulu, and upgrades to Bintulu LNG to allow for very sour and high CO₂ content fields would be expensive and time consuming.

As a result of these supply declines, Malaysia’s LNG production will fall from 29Mt in 2021 to 23Mt in 2030 and 20Mt in 2040.

Singapore

Singapore is investing in renewables and potentially nuclear to transition away from LNG, but while the gas share of the energy mix will fall, net demand will continue to grow. The nation is heavily reliant on LNG, currently producing nearly 90% of its electricity from gas-fired power stations. LNG demand will grow 26% from 3.5Mt in 2023 to 4.4Mt in 2040.

The gas market may continue to grow if renewable power developments stall due to lack of available land. Improving energy efficiency and reliability remain the key focus.