Wood Mackenzie Projects 16% Uplift to Southeast Asia LNG Demand Growth From AI Data Centres Through 2035
Singapore's near-total gas dependency and Malaysia's 3.9 GW data centre pipeline translate the forecast almost directly into JKM offtake.
Wood Mackenzie projected on September 10 that artificial intelligence infrastructure spending will increase the average annual LNG demand growth rate in Southeast Asia by 16% through 2035, well above what demographic tailwinds alone would sustain. Bain & Company and Standard Chartered separately estimated that data centres, electric vehicles and green industrial clusters will generate roughly 100 terawatt-hours of incremental power demand across the region by the end of the decade.6,5
JKM spot was marked at $24.88/MMBtu on September 12, but the broader market on the benchmark has been running bearish. The structural demand case from consultants unfolds over nearly a decade and rests on infrastructure coming online, not on current cargo movements. Near-term pricing is not reflecting the longer-range projections.
The data centre pipeline is the core of the thesis. Wood Mackenzie found Southeast Asia's pipeline is set to more than triple from 2.8 gigawatts to 9.4 gigawatts by 2035, with electricity demand from those facilities growing commensurately. Singapore, Malaysia and Thailand are positioned to capture most of the LNG opportunity.3,4
Singapore's position is the most structurally exposed. The city-state's grid runs on approximately 95% gas as of September 2026, meaning every new data centre megawatt translates into nearly direct LNG demand. Piped imports from Malaysia and Indonesia are expected to cease by the early 2030s, pushing Singapore toward 100% LNG import reliance.3
Malaysia adds scale. The country has 3.9 gigawatts of data centre capacity under development and is already building new regasification terminals to serve the associated power load. This separates Malaysia from markets where data centre ambitions remain at the announcement stage.3
The technology selection locks in the gas connection. Combined-cycle gas turbines are the most viable option for meeting data centres' continuous power requirements at scale across Southeast Asia, Wood Mackenzie said, with grid-scale battery storage remaining commercially immature through the mid-2030s. Renewables cannot provide the 24/7 reliability hyperscale operators require, which is what routes data centre load toward gas rather than wind or solar.4
Asia-Pacific LNG demand overall is falling to 257 million tonnes, International Gas Union president Andrea Stegher said. Southeast Asia is the counterweight. Population growth, rising living standards and domestic gas depletion are pulling the region toward LNG imports at the same time that demand is softening elsewhere across Asia-Pacific.2
The Philippines illustrates the depletion side of the equation. Malampaya, the country's sole domestic gas source, has had its licence extended to 2039, but Phase 4 wells starting in Q4 2026 will not offset production loss from current wells, which cease output at end of 2027. That gap widens precisely as regional data centre demand is building.1
South Asia draws the contrast that makes Southeast Asia's case specific rather than general. LNG-to-power generation costs two to three times more than renewables paired with battery storage in India, Wood Mackenzie said, making it unlikely that LNG captures comparable data centre growth there. Grid composition, not development ambition, is what separates the two regions' demand trajectories.4
Md Fadhlullah Omarali, principal analyst at Wood Mackenzie, said the counterparty profile of data centre demand distinguishes it from conventional industrial gas offtake. Hyperscale operators carry investment-grade credit and sign long-duration power purchase agreements, which anchor CCGT project financing and, by extension, the gas supply contracts underneath. That credit quality could attract long-term LNG supply on terms that spot-exposed industrial demand cannot match.3
Whether JKM pricing begins to reflect the Wood Mackenzie forecast in coming years depends heavily on Malaysia's regasification capacity additions keeping step with data centre commissioning. If terminals lag the build, incremental spot demand could emerge faster and earlier than current bearish positioning implies.3,6