Natural gas demand to outpace oil and coal in Southeast Asia as region targets 30% share by 2050

Natural gas is set to become a cornerstone of Southeast Asia’s energy future, projected to account for up to 30% of the region’s primary energy mix by 2050 according to Wood Mackenzie. With demand expected to outpace both oil and coal, countries like Malaysia, Thailand, the Philippines, and Vietnam are leading a shift toward gas to support economic growth, energy security, and the transition away from more carbon-intensive fuels.  

Wood Mackenzie’s report on the Southeast Asia gas strategic planning outlook projects gas demand will grow at an average compound annual growth rate (CAGR) of 3.1% until 2035. Regional gas power capacity is expected to double, with consumption projected to rise by approximately 89.5% from 2025 to 2050.  

Gas power generation in Southeast Asia by 2050 

Source: Wood Mackenzie

Johnson Quadros, head of Gas & LNG research at Wood Mackenzie said, "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.”  

Southeast Asia to become net LNG importer by 2032   

According to Wood Mackenzie, Southeast Asia will become a net LNG importer by 2032, with demand expected to increase by approximately 182% over the next decade. This shift will create opportunities for LNG suppliers, as the region is expected to host some of the fastest-growing markets globally by 2050.  

“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,” said Raghav Mathur, principal research analyst for Gas & LNG at Wood Mackenzie. “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.”  

LNG growth to face cost and infrastructure hurdles  

LNG affordability continues to present a challenge to demand growth as Southeast Asia shifts toward an LNG-dominated gas mix. The report highlights that government support—through subsidies, tax incentives, or favourable policies across the gas and power value chains—will be critical for the success of LNG-to-power projects. Securing Power Purchase Agreements (PPAs) for these projects will be vital in sustaining the region’s growth trajectory.   

Wood Mackenzie’s report highlights the critical need for multiple Floating Storage Regasification Units (FSRUs) through 2030. However, uncertainty around FSRU availability may pose risks to growth plans. Identifying strategic partners and addressing financing challenges for LNG infrastructure development will be essential to meet the region’s rising gas demand.  

Note to editor: Wood Mackenzie’s Southeast Asia gas strategic planning outlook covers Indonesia, Malaysia, The Philippines, Singapore, Thailand and Vietnam