Thailand’s LNG trajectory: balancing growth, supply and sustainability

Thailand’s sustained economic expansion is powering a steady rise in electricity demand, and for now, that means continued reliance on natural gas and LNG. With coal remaining politically unviable and renewables progressing at a slower pace, gas is expected to retain a dominant share in the power mix, accounting for more than 60 percent of generation in the medium term. 

This reliance is not without its limits. Our projections indicate that gas demand will peak at around  55.5 bcm by mid-2030s, then plateau through to 2050. While the upcoming draft of the National Energy Plan (NEP) 2024 is expected to prioritise renewables, gas and LNG are likely to remain at the centre of Thailand’s energy strategy in the near-to- medium term. 

Over the longer term, however, the picture becomes less certain. The expansion of renewables, the potential of hydrogen co-firing, and evolving policy priorities could gradually chip away at gas’s dominance. 

Read on for insight into Thailand’s LNG outlook, infrastructure development and market liberalisation. 

Thailand’s economic growth continues to fuel gas demand 

Thailand’s strong economic trajectory is driving higher power consumption, firmly establishing natural gas as a cornerstone of the country’s energy mix. With coal remaining politically and socially unpopular, gas is set to maintain a leading role in power generation at least through the medium term. That said, this momentum faces potential challenges from trade-related headwinds and a slowdown in industrial demand, both of which could influence overall gas consumption patterns over time. 

LNG demand rises as domestic supply faces pressure 

Structural challenges in domestic gas production are shifting the balance towards greater reliance on LNG. The share of LNG in Thailand’s gas mix is expected to climb to 60 percent bymid-2030s.. After a sharp 39 percent increase in LNG imports from 2022 to 2023, volumes stabilised around 11.3 million tonnes per annum in 2024, buoyed by a recovery in output from the Erawan gas field. 

Despite these short-term gains, the medium-term outlook remains constrained. Declining pipeline imports from Myanmar and the natural decline of mature gas fields are likely to tighten domestic supply further. This growing supply-demand gap is expected to accelerate LNG demand throughout the decade. 

Infrastructure expansion and long-term contracts underpin LNG readiness 

In response to rising LNG demand, Thailand has actively expanded its infrastructure and secured new supply agreements. In 2024, state-owned PTT signed five-year sales and purchase agreements with Oman LNG and Brunei LNG, with deliveries expected to begin in 2025. 

The commissioning of Thailand’s second regasification terminal in 2022 increased the country’s LNG handling capacity to about 19.1 million tonnes per annum, sufficient to meet demand until around 2028.  If the proposed 8 mmtpa of additional capacity comes online, it would sustain infrastructure coverage into the late 2030s. However, after 2035, rising LNG demand will once again put pressure on the need for additional infrastructure planning. 

Market liberalisation and affordability will drive future growth 

Thailand’s LNG market is becoming more competitive as private players enter the import sector. Since EGAT broke PTT’s monopoly with a spot cargo purchase in 2019, companies such as Gulf Energy and B.Grimm have stepped up LNG procurement to support their power plants and improve supply flexibility. 

This increased diversification will potentially lead to more competitive pricing and flexible contract terms and further enhance LNG affordability over time for end users. Given LNG’s rising share in the power mix, maintaining competitive prices will be vital to sustaining demand growth. 

Looking ahead 

Thailand is forging a path towards deeper LNG integration, supported by shifts in domestic supply fundamentals and a proactive approach to policy and infrastructure development. While uncertainties around renewables, hydrogen, and international trade remain, the country is making clear progress to ensure LNG remains a key pillar in its energy transition. 

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