A new report from the Institute for Energy Economics and Financial Analysis (IEEFA) reveals that over half of proposed LNG-to-power projects in four key Southeast Asian markets have been either scrapped or stalled since 2021. The total value of these delayed or canceled projects amounts to $67.8 billion, nearly 4.5 times the value of projects that were completed during the same period.
The five-year analysis covered $109.2 billion worth of proposed LNG-fired power projects and $21 billion worth of planned LNG import terminals in the Philippines, Vietnam, Thailand, and Bangladesh. The report identified 49 proposed LNG-fired power plants and 22 regasification terminals that were either canceled or showed no progress between 2021 and 2026.
Sam Reynolds, co-author of the report and IEEFA Asia’s LNG/Gas Research Lead, highlighted that rising costs and market volatility have increased risks for project financing. 'Recent developments in fuel, equipment, and currency markets have exacerbated execution risks for LNG-to-power projects in emerging Asian economies while weakening the revenue certainty needed to secure project financing,' Reynolds commented.
Christopher Doleman, another co-author and IEEFA Asia’s LNG/Gas Specialist, noted that the total levelized cost of electricity from LNG-fired power plants could increase by up to 130% relative to baseline assumptions in 2021. He added that energy-sector development plans in emerging Asia, which relied on assumptions of lower fuel prices and affordable capital costs, no longer hold.
Despite these challenges, analysts at Wood Mackenzie predict that the AI boom and data center construction in Asia could significantly boost Southeast Asia’s LNG demand. Combined-cycle gas turbines (CCGT) remain the most reliable 24/7 power provider for hyperscalers, given the relatively immature state of renewable energy-plus-batteries across the region.