Even as the global gas crisis upends the liquefied natural gas (LNG) trade, Asia is still positioned to build the majority of new terminals to import LNG, according to a Global Energy Monitor survey.
LNG projects totaling 442 million tonnes per annum (mtpa) of new import capacity are at various stages of development in Asia, 65% of new developments globally, and enough to theoretically absorb the entire global LNG trade of 2021. This US$119 billion investment could lock Asian economies into reliance on a volatile, expensive energy source and challenge global efforts to address the climate crisis.
New Asian LNG projects face a difficult market. In the wake of Russia’s invasion of Ukraine, European countries have rushed to secure new gas supplies, elevating the cost of LNG worldwide. High LNG prices have already had a significant impact across Asia.
According to the International Energy Agency (IEA), LNG imports were down 7% year-on-year between January and August, with spot cargoes down 28% over the same period. Price sensitive South Asian LNG buyers, particularly Pakistan and Bangladesh, are finding it difficult to pay high spot prices as the region moves into the winter. Major forecasting agencies have found that these conditions could depress future gas demand in emerging Asian economies.
- China is planning the largest LNG buildout in the region. Its 214.9 mtpa of LNG import projects is estimated to cost US$72.1 billion and amounts to almost half of all such capacity in development in Asia. Other leading countries developing LNG import terminals include India, Vietnam, Thailand, the Philippines, and Pakistan.
- Asia has enough LNG import projects in development to boost global LNG import capacity by nearly 50%, and a third of these projects (145 mtpa) are already in construction.
- Amid a challenging environment for new LNG import projects, just two 1-mtpa terminals in Asia have been commissioned since the beginning of 2022. Only 17.1 mtpa of new import capacity came online the year before that.
- Future LNG supplies for Asia could come from exporters with the most new projects in development, such as the United States (322.5 mtpa), Russia (133 mtpa), and Canada (75.6 mtpa), although globally progress advancing such projects has been mixed.