MELBOURNE, 3 September 2026 – Southeast Asia’s growing reliance on gas risks weakening rather than strengthening energy security, according to new analysis from the Energy Shift Institute.
The analysis finds that while gas-fired power remains a reliable power source and can support grid reliability, new gas generation in Southeast Asia will increasingly depend on imported liquefied natural gas (LNG), raising questions about supply security, cost and reliability.
As domestic gas production declines and demand continues to rise, Southeast Asia is expected to become a net gas importer around 2027–28, increasing its exposure to geopolitical disruption, global price volatility and supply competition. The recent disruption around the Strait of Hormuz has brought this exposure into focus, disrupting LNG flows through a route that normally carries almost one-fifth of global LNG supply and accounts for 30% of Southeast Asian gas imports.
Figure 1. Southeast Asia’s Widening Gas Import Gap: Domestic Output versus Demand, 2015-2050 (bcm)
According to the International Energy Agency, the region’s LNG import bill could increase threefold, from approximately US$80 billion in 2024 to about US$245 billion by 2035.
While gas provides dispatchable and weather-independent power, advances in batteries, grid infrastructure and firmed renewables are increasingly offering comparable flexibility, reducing gas’s unique role in ensuring grid reliability.
“Reliability is not the same as energy security,”
said Cameron Fairlie, Principal at the Energy Shift Institute. “A gas plant can dispatch power when needed, supporting reliability at the plant level. But if it depends on imported LNG exposed to global price shocks and geopolitical disruption, it can weaken energy security at the system level.”
The analysis challenges the common narrative that gas is the region’s affordable transition fuel and that more imported gas can provide genuine long-term energy security. At recent LNG prices, gas-fired generation can become significantly more expensive than firmed solar power, particularly once import terminal and regasification costs are included.
The Energy Shift Institute argues that policymakers and financiers should assess new gas projects against four practical tests: whether supply remains secure through price shocks over the life of the asset; whether gas provides firm capacity that domestic storage-backed renewables cannot; whether it is the lowest-cost firm option against firmed solar power on a like-for-like basis; and whether it delivers a genuine transition benefit against gas’s “cleaner than coal” advantage once full life-cycle emissions are counted.
New import-dependent gas projects in Southeast Asia are struggling to meet all four energy security tests. As Southeast Asia becomes increasingly reliant on imported LNG, the case for gas is weaker than it was five years ago, while firmed renewables are becoming more competitive once current LNG prices and full value-chain costs are taken into account.
“Imported LNG should be treated as a limited, time-bound tool, not the default answer to Southeast Asia’s energy security challenge,” Fairlie said. “The region needs secure, firm and affordable power, which is why each project should be tested on supply, firmness, cost and carbon before proceeding.”
Media contact
Cameron Fairlie, Principal & Transition Finance Lead ESI
Cameron Fairlie leads research on the credibility and financial integrity of transition financing Asia’s power systems, with a focus on real-world investment decisions. His work draws on his experience with gas and coal assets, particularly in relation to operating performance, and costs and emissions, and is complemented by his advisory work with governments on hydrogen transition strategies and low-carbon energy planning.
cam@energyshift.institute; enquiry@energyshift.institute
About ESI
Energy Shift Institute is an independent energy finance think tank that analyses Asia’s energy transition from within the region. Energy Shift Institute aims to help position Asia for its future economic leadership by facilitating a more aggressive energy transition, through innovation in strategic finance and policy, while also exploring technology opportunities and risks.