Asia’s liquified natural gas (LNG) market is on the cusp of a major transformation. According to energy consultancy Wood Mackenzie, the region represents an “unprecedented opportunity” for LNG suppliers and investors, with demand projected to surge significantly by 2030. However, the extent of this growth will depend heavily on affordability and the pace of tariff and regulatory reforms across Asian markets.
Rising Supply and Demand Outlook
Global LNG supply is expected to increase by 40% by 2030, fueling hopes of greater accessibility for Asia. Wood Mackenzie forecasts Asian LNG demand to rise by 115 million tonnes between 2024 and 2030, largely driven by the power sector’s shift away from coal and its need to support renewable energy. Spot LNG prices, which currently hover around $12–$13 per mmbtu, are projected to fall to an average of $8.80 by 2028–2030. This drop marks a sharp contrast to the post-Ukraine war price peaks above $430 per mmbtu, signaling improved affordability ahead.
The Role of Tariffs and Subsidies
Despite the promising outlook, affordability remains a hurdle. Many Asian governments currently spend billions subsidizing LNG imports due to mismatches between regulated electricity tariffs and market prices.
Four markets Vietnam, Thailand, Bangladesh, and China’s Guangdong province account for nearly a quarter of Asia’s gas-to-power demand. Falling spot prices could ease subsidy burdens in Vietnam, Guangdong, and Thailand by 2030, enabling longer-term contracts and stronger market growth. However, Bangladesh may continue to struggle, with LNG prices still projected to trade about $3 per mmbtu above affordable levels by 2030.
Asia’s LNG market holds extraordinary potential for expansion, offering suppliers and investors access to 115 million tonnes of new demand by 2030. Yet, the pace and scale of this growth will be shaped by how governments manage affordability challenges and regulatory reforms.
While falling LNG prices present a clear path toward more mature, market-driven demand, fiscal and structural constraints in several regions could slow progress. Ultimately, the coming years will determine whether Asia can fully unlock its LNG potential.
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Source: Lloyd’s List
