Southeast Asia Scraps $52 Billion in Gas Plants as LNG Costs Bite
Forty-seven proposed gas projects stalled or scrapped across the Philippines, Thailand and Vietnam have put $107 billion in wider regional LNG infrastructure at risk.
Some 47 proposed gas-fired power plants with a combined cost of $52 billion have been cancelled, withdrawn or stalled with no visible progress across the Philippines, Thailand and Vietnam between 2021 and 2026, the Business Times reported Monday (2026-09-14), citing an energy research institute. The paper attributed the retreat to a $7 billion gas bill that has made LNG unaffordable as a bridging fuel for developing Asian economies.6
JKM spot LNG, the Asian benchmark, was $24.88/MMBtu on Monday (2026-09-14). For utilities in countries with regulated retail tariffs and constrained government budgets, those prices make new gas-fired capacity unworkable before a single turbine turns. The numbers do not close.6
Asian utilities began switching to coal when the supply disruption hit. The war involving Iran choked key LNG shipping routes and pushed prices sharply higher, industry officials said. In South Asia, Bangladesh moved to coal-fired generation and electricity imports in May 2026 (2026-05), government data showed, one of the more concrete early indicators of fuel substitution spreading across the region.2
In May 2026 (2026-05), Wood Mackenzie's Lucas Schmitt said the conflict would "significantly reduce Asian LNG demand growth in 2026." His firm cut its Asian LNG import forecast to about 5 million metric tons from 12.4 million tons, assuming a two-month disruption to Middle East supply — a scale of revision that illustrated how quickly the war was expected to reshape structural demand, not just near-term spot volumes.2
Global Energy Monitor estimated around $107 billion in planned infrastructure investments in the region could be at risk, spanning power plants, import terminals and pipeline connections. That figure covers the full demand-side buildout that LNG exporters have been counting on to absorb supply growth from Australia and new North American projects.2
The retreat by the most price-sensitive buyers has not suppressed overall demand. LNG consumption is set to hit a record high in 2026, the IEA forecast, as a strong El Niño lifts air conditioning loads and compensates for the pullback from developing markets. But record volumes do not mean a broadly healthy market. Growth is concentrated in wealthier importers — Japan, South Korea and China — that can absorb spot price volatility. The Philippines, Thailand and Vietnam cannot.6
The conflict has also pushed buyers to seek alternatives to Qatar, a major regional supplier before the disruption. Canada's energy industry sees the gap as an opening. A new industry report identifies Asia as essential for trade diversification away from the United States, and under a Phase 2 expansion, the Kitimat LNG terminal could double its export capacity to as much as 30 million tonnes a year.3,6
TotalEnergies announced on Sunday (2026-09-06) that Papua LNG had achieved major contractual and commercial milestones, marking decisive steps toward a Final Investment Decision — another potential non-Middle East supplier trying to move toward project sanction as buyers seek stable sources.4,5
Further out, some forecasters estimate Australia's LNG production through roughly the mid-2030s could pass Qatar's and reach up to 100 million metric tonnes per annum, though that structural supply shift would land well after the current market stress has resolved or deepened.1
Newcastle coal was $139.05/tonne on Monday (2026-09-14), and at those prices the switching economics favour coal over LNG for most Southeast Asian utilities with dual-fuel capacity. Each month that gas-plant projects remain cancelled, coal infrastructure becomes more entrenched. Bangladesh's switch in May 2026 (2026-05) represents demand the LNG industry will not recover unless prices fall enough for developing markets to absorb and sustain offtake — a threshold the current JKM price level sits well above.2,6