The demand for liquefied natural gas (LNG) in India and Southeast Asia is experiencing a significant surge. This growth is being fueled by a combination of factors, including soaring temperatures and a concerted effort towards decarbonization. Both India and Southeast Asia are increasingly turning to LNG as a cleaner and more cost-effective fuel alternative.
According to data from LSEG, LNG trade flows to India and South Asia witnessed a 9% year-over-year increase in 2023, reaching 33.27 million tonnes. The momentum is expected to continue in 2024, with figures for January to July already reaching 23.06 million tonnes. In July, LNG shipments to South Asia surpassed monthly exports to Europe for the first time since autumn 2021, reaching 3.51 million tonnes.
Southeast Asia has also seen a substantial increase in LNG demand. In 2023, LNG trade flows to the region climbed 26% to a record 25.68 million tonnes. For the period between January and July 2024, the figure rose by 23% year-over-year to 17.96 million tonnes. This growing demand is reflected in the emergence of new importers like Vietnam and the Philippines, who began importing LNG in 2023, alongside established importers such as Thailand and Singapore.
The Philippines and Vietnam, new entrants to the LNG market, have significantly increased their purchases. Vietnam received three LNG cargoes in April and May for power generation, while the Philippines has imported nine cargoes so far this year compared to 11 for the entire year of 2023.
The demand for cooling is expected to continue rising as Northeast Asia enters its summer months. Japan’s meteorological agency has forecast temperatures likely to be higher than average from June to August. China’s energy regulator has also issued a warning about tight power supply in some regions over the next few months due to increased consumption. As of May 26, Japan’s LNG stockpiles by utilities stood at 2.06 million tons, below the five-year average for the period, as Tokyo is already experiencing hot weather.
Several power companies in the region have issued tenders seeking LNG for delivery in July. These include Korea Midland Power Co. in South Korea, PTT, a state-owned energy firm in Thailand, First Gen, a power producer in the Philippines, and Rupantarita Prakritik Gas Co Ltd, a state-owned company in Bangladesh. This surge in demand highlights the growing reliance on LNG as a crucial energy source in the region.
