AI Boom to Boost Southeast Asia’s LNG Demand

Wood Mackenzie analysts say the regional AI and data center buildout will materially increase LNG requirements in Southeast Asia, because combined-cycle gas turbines (CCGT) are viewed as the most dependable around-the-clock power source while grid-scale batteries and other storage solutions remain commercially immature. As domestic gas output peaks and some cross-border pipeline supplies decline, countries with fast-growing data center demand will need to boost LNG imports to fill the gap through 2035. The consultancy estimates that the data center boom could lift annual LNG demand growth in Southeast Asia by about 16% through 2035. The region’s data center project pipeline could expand from roughly 2.8 GW today to about 9.4 GW by 2035, driving hyperscaler power consumption from around 17 TWh to 57 TWh. Wood Mackenzie highlights the stable and creditworthy nature of hyperscaler off-takers as a factor that changes the risk calculus for new supply into the region. Country-level dynamics underscore the shift toward LNG. Singapore’s grid is already about 95% gas-dependent and, with piped imports from Indonesia and Malaysia expected to end in the early 2030s, the city-state’s reliance on LNG could reach full dependence by 2035. Thailand—where around two-thirds of power is gas-fired—may see LNG account for more than half of its gas supply by 2035 as domestic production and pipeline imports decline. Malaysia is actively expanding data center capacity (about 3.9 GW in development) and constructing new regasification terminals to accommodate rising demand. At the same time, infrastructure and grid constraints could temper the pace of expansion. A Bain & Company and Standard Chartered report warns that limited transmission capacity and connection delays risk constraining further data center investment, and notes that data centers, EVs and green industrial clusters could add about 100 TWh of demand by the end of the decade. Of roughly $540 billion in green power and EV capital expenditures announced in the region through 2030, about $315 billion is judged to be on a credible path to deployment under current conditions. On the global front, Shell projects LNG demand could rise to nearly 700 million tonnes a year by 2050—about a 65% increase from 2025 levels—though growth in the near term has been disrupted by events such as the Strait of Hormuz crisis. Wood Mackenzie also notes that the South Asian case differs: in India, where data center capacity is expected to reach nearly 12 GW by 2035, gas-to-power remains uneconomic versus renewables plus batteries and gas is forecast to stay at under 2% of the power mix through 2035.