Wood Mackenzie Links Southeast Asia's Data Centre Boom to Structural LNG Demand Growth
Southeast Asia is diverging sharply from Asia-Pacific's broader LNG decline, with hyperscale power needs underpinning long-term import demand.
Southeast Asian data centre power demand is set to quadruple from 2.6 GW to 10.7 GW by 2035, Wood Mackenzie said on Sunday (2026-09-06), in an analysis that places the sub-region on a divergent path from the broader Asia-Pacific LNG market.7,2
Asia-Pacific LNG demand is forecast to fall 4.1% in 2026, dropping from 268 million tonnes in 2025 to 257 million tonnes, according to Wood Mackenzie, marking the second consecutive annual decline. Southeast Asia is running against that direction. Population growth, rising living standards, and the depletion of domestic gas reserves have been building the region's import case for years; the data centre buildout is layering additional, long-duration power demand on top of that base.4,6
The breadth of the demand shift goes beyond data centres alone. Across data centres, electric vehicles, and green industrial parks, Southeast Asian power demand is forecast to grow by more than 100 TWh over the next three to four years, with the sectors requiring more than $200 billion in investment across regional power and EV value chains.1
What gives the trend particular weight for LNG markets is the nature of the buyers. Md Fadhlullah Omarali, principal analyst at Wood Mackenzie, said that "what makes data centre demand interesting from an LNG perspective is the counterparty profile" — a reference to the creditworthiness and long-term contracting appetite of hyperscale technology companies, which differ sharply from traditional utility buyers who often lack the balance sheets or offtake certainty to support multi-decade supply deals.7
Southeast Asia's power infrastructure will need to expand rapidly to absorb that demand. Analysts put the annual grid investment shortfall at $18 billion by 2035. That gap creates execution risk even where the demand signal looks durable.1
Malaysia illustrates the timing problem. Data centre demand there is expected to peak around 2030, but nuclear capacity is not projected to arrive in time to serve that peak. In the interim, gas-fired generation is the most readily deployable bridging fuel, anchoring the LNG import case through the decade whether grid planners want it or not.5
South Asia tells a different story. India and Bangladesh are not in a position to absorb materially higher LNG volumes; high spot prices are rationing demand. JKM, the Asian LNG benchmark, was trading at $24.02/MMBtu on Tuesday (2026-09-08), well above what Bangladesh or India can consistently absorb on the spot market. In Bangladesh, plans for a hyperscale data centre at Kaliakair or other economic zones remain at early stages, with the country still reliant on basic power infrastructure that cannot support large-scale gas import demand.3,5,6
The divergence between sub-regions is sharpening. Southeast Asian governments and utilities have the creditworthiness and regulatory frameworks to sign long-term LNG supply agreements; South Asian buyers are largely confined to spot purchasing at prices that routinely curtail offtake. Wood Mackenzie's Sunday (2026-09-06) note described South Asia as essentially beyond reach for structural LNG demand growth in the current price environment.7,3
Taiwan, meanwhile, is expected to replace more than 75% of any LNG shortfall through spot purchases, a higher ratio than regional peers according to Wood Mackenzie, reflecting the island's purchasing capability and supply necessity rather than any underlying demand strength.3
The $18 billion annual grid investment shortfall is the constraint most likely to slow Southeast Asia's LNG buildout. If grids cannot be expanded quickly enough to connect new gas-fired capacity to surging data centre loads, demand projections slip regardless of how creditworthy the technology sector buyers are. How quickly Malaysia, Vietnam, and their neighbours close that investment gap sets the practical ceiling on contracted LNG volumes through the early 2030s.1