Natural gas is poised to become a cornerstone of Southeast Asia’s energy landscape, with Wood Mackenzie projecting it will account for up to 30 per cent of the region’s primary energy mix by 2050.

Demand for natural gas is expected to surpass both oil and coal, as countries such as Malaysia, Thailand, the Philippines, and Vietnam lead a strategic shift toward gas to drive economic growth, bolster energy security, and accelerate the transition away from more carbon-intensive fuels.

Wood Mackenzie’s Southeast Asia gas strategic planning outlook estimates that regional gas demand will grow at an average compound annual growth rate (CAGR) of 3.1 per cent until 2035.

Gas-fired power capacity is set to double, with overall consumption projected to increase by approximately 89.5 per cent from 2025 to 2050.

Johnson Quadros, head of Gas & LNG research at Wood Mackenzie, explained the drivers behind this surge: “The surge in gas demand is driven by the region’s rapidly growing economies, data centres expansion, the intermittent nature of renewable energy, and the ongoing transition from coal to gas power.

“However, the region faces challenges in meeting this demand through domestic production alone.”

Wood Mackenzie forecasts that Southeast Asia will become a net importer of liquefied natural gas (LNG) by 2032, with demand expected to climb by approximately 182 per cent over the next decade.

This transition will open significant opportunities for LNG suppliers, as the region is projected to host some of the fastest-growing markets globally by 2050.

Raghav Mathur, principal research analyst for Gas & LNG at Wood Mackenzie, highlighted the evolving supply dynamics: “As domestic gas demand rises and energy security becomes an increasing concern, Southeast Asian countries — particularly Indonesia and Malaysia — shift their focus toward boosting domestic production.

“Newly commissioned fields and recent discoveries are likely to sustain output through the late 2020s, with yet-to-find volumes projected to come online and maintain supply into the mid-2030s.

“However, the region will face a natural decline in supply, thereafter, making infrastructure-led and frontier exploration critical to unlocking future volumes for both LNG exports and domestic consumption.”

Despite robust demand projections, LNG affordability remains a challenge.

The report underscores the importance of government support — via subsidies, tax incentives, or favourable policies across the gas and power value chains — for the success of LNG-to-power projects.

Securing Power Purchase Agreements (PPAs) will be vital to sustaining the region’s growth trajectory.

Wood Mackenzie also stresses the need for multiple Floating Storage Regasification Units (FSRUs) through 2030.

However, uncertainty around FSRU availability may pose risks to growth plans.

The identification of strategic partners and solutions to financing challenges for LNG infrastructure will be essential to meet Southeast Asia’s rising gas demand.