AI boom could accelerate Southeast Asia’s LNG demand growth by 16% — Wood Mackenzie
The rapid construction of data centers for artificial intelligence systems could increase the average annual growth rate of demand for liquefied natural gas in Southeast Asia by 16% through 2035. Analysts at Wood Mackenzie issued this forecast, OilPrice reports.
According to the consulting company’s estimate, the region’s data-center project pipeline could more than triple by 2035, from the current 2.8 GW to 9.4 GW. Electricity consumption by major cloud-computing operators is expected to rise from 17 to 57 TWh.
Reliable power supply
Wood Mackenzie considers combined-cycle gas turbines to be one of the reliable options for round-the-clock power supply to data centers. Analysts explain this by saying that renewable-generation systems combined with industrial energy storage in the region are unlikely to reach sufficient commercial maturity by the middle of the next decade.
Wood Mackenzie chief analyst Fadlullah Omarali noted that data centers are large, creditworthy consumers with stable electricity demand that does not depend on economic cycles. In his view, this changes the risk assessment for supplying new LNG volumes to Southeast Asian countries.
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LNG imports
Singapore, Malaysia, Thailand, and Indonesia may require additional LNG imports as natural gas production in the region reaches its peak. Singapore’s power system already depends on gas for 95% of its supply, and by 2035 its dependence on LNG could reach 100% due to the expected end of pipeline supplies from Indonesia and Malaysia in the early 2030s.
In Thailand, LNG’s share of gas supply could exceed 50% by 2035 due to declining pipeline gas imports from Myanmar and falling production in the Gulf of Thailand. Malaysia is developing 3.9 GW of data-center capacity and building new regasification terminals to meet growing electricity demand.
India, according to Wood Mackenzie, will be an exception: its data-center capacity could grow fivefold, to nearly 12 GW by 2035. LNG-fired power generation there costs two to three times more than renewable energy with battery systems. Gas accounts for less than 2% of India’s electricity generation mix and is forecast to remain at that level through 2035.
