Data Centers Fuel Southeast Asian LNG Demand Boom

The rapid growth of data centers in Asia is creating two vastly different outcomes for liquefied natural gas (LNG) demand across Southeast Asia and South Asia, according to a new report from Wood Mackenzie.

While Southeast Asia emerges as a significant new demand driver, South Asia remains structurally out of reach for gas. The report notes that Southeast Asia's data center pipeline is set to triple from 2.8 GW today to 9.4 GW by 2035, with electricity demand from data centers growing from 17 TWh to 57 TWh over the same period.

Combined-cycle gas turbines (CCGT) are currently the most viable technology capable of meeting data centers' reliability requirements at scale in Southeast Asia, as grid-scale battery storage remains commercially immature across the region through the mid-2030s. Wood Mackenzie's Md Fadhlullah Omarali notes that 'what makes data center demand interesting from an LNG perspective is the counterparty profile.'

These are large, creditworthy off-takers with power needs that remain stable regardless of economic cycles, changing the risk calculus for new supply into Southeast Asia.