Southeast Asia weighs energy transition amid LNG supply crunch

Energy ministers and executives met in Bangkok on Monday to discuss the prolonged price increase for liquefied natural gas (LNG) triggered by the Iran war, with Southeast Asia’s growth ambitions and climate goals on the line as the cost of powering economies shifting to artificial intelligence soars. On the first day of Gastech 2026, one of the world’s largest energy conferences, policymakers implored pragmatism over net-zero targets and closer cooperation to ensure affordable LNG supplies, particularly among Southeast Asian neighbours whose industrial plans remain hooked on gas generation. The region’s energy security has been brutally exposed since the US and Israel attacked Iran in late February, resulting in the virtual closure of the Strait of Hormuz and what Tengku Mohammad Taufik, CEO of Malaysian state energy giant Petronas, described as a “debacle” that has “curtailed, disrupted or disturbed” a fifth of the world’s gas supplies. Singapore’s economy is virtually fully powered by natural gas, most of it imported from Malaysia and Indonesia, Southeast Asia’s largest producing nations. Gastech host Thailand, meanwhile, has its own gas fields but their reserves are dwindling, increasing reliance on imports whose price has spiked. Main supplier Qatar was forced earlier this year to suspend LNG production due to drone strikes by Iran. The Southeast Asian kingdom aims to boost its capacity to handle LNG by 40 per cent from 19 million tonnes each year as its power needs surge, and it eyes greater imports and a future role as a trading hub. Natural gas would remain “an important foundation of Thailand’s power system”, Thai Prime Minister Anutin Charnvirakul said, while renewables would also be gradually increased as a share of the energy mix. Fossil fuels would continue to underpin the economy “while we work to diversify supply, strengthen domestic energy security, improve efficiency and improve our exposure to global markets”. With LNG supplies from Qatar – the world’s largest producer – strangled by Iranian threats to ships passing through the Strait of Hormuz, power plants across many Asian economies have faced delays or losses on pre-ordered gas deliveries, pushing them into expensive spot markets for the crucial energy source. An analysis of LNG purchases published by Bloomberg on Monday estimated that India, Pakistan, Bangladesh, Thailand and Vietnam have collectively spent an additional US$7.4 billion on LNG since the Iran war, more than double the costs of the previous year. That has stirred debate and a rethink of where the future of energy lies. Some experts say that the price shock could nudge more countries towards speeding up their adoption of cheaper renewables like solar, wind and hydrogen. But delegates also raised the prospect of softening commitments to reduce fossil fuel consumption as the immediate needs of economies chasing technology-driven growth outweigh net-zero targets – and calls to tackle the climate crisis. “There’s a changing debate about energy in the world today,” Tony Blair, the former British prime minister, said during the conference. “I think arguments around climate change and fossil fuels are still there [but] people have understood that energy security is essential and energy supply is essential for growth,” said the head of the Tony Blair Institute for Global Change, citing the increased demand for fuels from Indonesia, Vietnam and Thailand. The supply of energy, particularly natural gas, was “a vital part of development”, Blair noted. “It’s not that people have given up on clean energy – renewable energy investment is still more than the investment in fossil fuels – but I think people have come to an understanding that you can’t put the two against each other.” Singapore, Thailand, Vietnam and Malaysia have all set 2050 as an ambitious target to reach net-zero emissions. But they have also invested in strings of power-hungry data centres that will require a massive injection of fossil fuels if they are to come online speedily. In a sign of the tensions between the push for greater reliance on fossil fuels as a driver of growth and those stridently against them, Greenpeace Thailand hung a giant banner outside the Gastech venue. The banner depicted Anutin and the slogan “Your Gas Deal, Our Loss” – a reference to his government’s backing of new gas and oil terminals, power plants and other infrastructure, especially in the eastern coastal area. While gas will remain crucial to Singapore, Gan Siow Huang, minister of state in the Ministry of Foreign Affairs and Ministry of Trade and Industry, said the ambition of establishing the Asean power grid – a vision to integrate a renewables-led electricity system across Southeast Asia, saving costs, losses of excess and slashing emissions – was a pathway towards sustainable and secure energy for the region. “Energy resilience is key and no single country can achieve [it] on its own. Multilaterally in the near term we are hoping to develop together with other Asean states the Asean power grid,” she said, referring to the Association of Southeast Asian Nations. “It’s very exciting … Asean is a growing economy; it needs power … there is renewable energy potential in the Asean states, but we need to unlock that.”

Southeast Asia weighs energy transition amid LNG supply crunch

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}At Gastech 2026, policymakers implore pragmatism over net-zero targets and closer cooperation to ensure affordable LNG supplies

At Gastech 2026, policymakers implore pragmatism over net-zero targets and closer cooperation to ensure affordable LNG supplies