Southeast Asia’s LNG Projects Face Delays as Renewables Gain Ground

October 12, 2026 - Southeast Asia’s plans to expand liquefied natural gas (LNG) imports and gas-fired power generation are facing growing challenges as geopolitical uncertainty, rising fuel prices, equipment shortages and increasingly competitive renewable energy reshape the region’s energy outlook.

Countries including Vietnam and the Philippines had planned new LNG import terminals and gas-fired power plants to meet growing electricity demand and support the transition away from coal. However, price shocks following Russia’s invasion of Ukraine in 2022 and the ongoing US-Iran conflict have highlighted the risks associated with dependence on imported fuels. A global shortage of gas turbines has further delayed infrastructure development.

According to Wood Mackenzie, only 14.9 GW of Southeast Asia’s planned 53 GW of gas-fired power projects are expected to come online by 2030. Vietnam faces the largest projected shortfall, with 25.7 GW of planned projects unlikely to begin operations within that timeframe.

At the same time, renewable energy is gaining momentum as governments seek to reduce exposure to international fuel price volatility and strengthen energy security. The International Energy Agency forecasts that wind and solar will account for 11% of Southeast Asia’s energy mix by 2030, up from 5% in 2025.

The Philippines is seeing increased adoption of rooftop solar as households and businesses look for ways to manage high electricity costs. At least three LNG-related projects in the country have been halted over the past two years, reflecting a combination of infrastructure challenges and changing market economics.

Thailand faces a more complex transition. While the country needs to secure reliable near-term LNG supplies, it is also under pressure to accelerate renewable energy deployment and diversify its energy mix.

Despite the setbacks, LNG demand across Southeast Asia is still expected to grow in the short term. Wood Mackenzie forecasts regional consumption to increase from 27 million metric tonnes in 2025 to 39 million metric tonnes in 2028, supported by economic growth, rising electricity demand and declining domestic gas production.

However, the longer-term outlook is becoming less certain. Rystad Energy has revised its Asia LNG demand forecasts downward by 3% for 2040 and 7% for 2045, citing infrastructure constraints, supply uncertainties and faster renewable energy development.

For Southeast Asia, the challenge is not simply choosing between natural gas and renewables. Gas can provide flexible generation to support grid reliability, while solar, wind and battery storage can reduce exposure to imported fuel costs. The region’s future energy mix will depend on how governments balance affordability, reliability, investment risks and decarbonisation goals.

As renewable technologies become increasingly competitive, project developers and investors will need to reassess long-term fuel assumptions, infrastructure requirements and the risk of assets becoming underutilised.