Asia's LNG Terminals Are Failing to Launch, and the Demand Loss May Outlast the Supply Shock
Fewer than one in nine planned LNG terminals reached operation across Southeast Asia, even as the Hormuz blockade drives JKM spot prices near winter highs.
Of 91 planned LNG import projects assessed across Southeast Asia, only 11% were successfully brought online, according to analysis published on Monday (2026-09-14). Six months into the Strait of Hormuz blockade, that failure rate is not a footnote. It is the core constraint on Asia's ability to diversify supply.7
Wood Mackenzie said Asia-Pacific needs far greater flexibility in sourcing LNG as a multi-year supply loss looms. The Hormuz closure has pulled around 80 million tonnes per annum of LNG from the global market. Qatar's main export terminal, which normally accounts for 17% of global flows, went offline after being struck by an Iranian drone, sidelining 12.8 MTPA of capacity for what analysts expect will be years.6,1,3
The Japan-Korea Marker benchmark for spot LNG deliveries to Northeast Asia sat at $24.88 per MMBtu on Monday (2026-09-14). Prices had already climbed to $24.614 per MMBtu on Tuesday (2026-09-01), traders told Bloomberg, the highest since the 2026 winter, as buyers competed for cargoes rerouted around the Gulf. LNG prices in Asia surged 143% from pre-conflict levels, crossing $25 per MMBtu, according to data cited by analysts.5,3
But the terminal infrastructure needed to receive diverted cargoes across much of Southeast Asia does not exist at scale. The 11% project completion rate covers Bangladesh, the Philippines, Thailand and Vietnam — markets that made no material infrastructure progress over five years before the crisis began. Vietnam's experience is the sharpest illustration: a 4.8 GW gas project secured priority status and cleared early approvals, then still failed to reach operation. In parallel, Vietnam's solar buildout contributed to a 60% decline in gas-fired generation, IEEFA data show.7
That demand-side shift is what the spot price rally may be underpricing. The price shock appears to be pushing utilities toward alternatives they were already developing, not toward new LNG receiving capacity. Thailand's draft power development plan now targets up to 89% clean power capacity by 2050. Bangladesh raised coal-fired generation and increased coal-based electricity imports, according to government data. Asian utilities broadly switched to coal as conflict-related LNG prices hit procurement budgets, industry officials said.7,2
Pakistan LNG, state-controlled, issued spot tenders during the week of July 13 (2026-07-13) to procure the most emergency cargoes since the Iran war began. That scramble underscores both the severity of the gap and how exposed countries without alternatives remain. Wood Mackenzie had already cut its forecast for Asian LNG imports to roughly five million metric tons, down from 12.4 million tons, assuming only a two-month disruption to Middle East supply. "The conflict will significantly reduce Asian LNG demand growth in 2026," said Lucas Schmitt, an analyst at Wood Mackenzie. The disruption has now run six months.4,2
Independent estimates suggest USD 400 billion in committed LNG investment could face stranding, with 250 to 300 MTPA of new capacity potentially underutilised by 2030. Those numbers sit uneasily alongside current JKM levels. If Asian buyers structurally reduce gas burn through coal switching and accelerated renewables, rather than building the import terminals LNG exporters need, the supply recovery priced into forward curves arrives into a materially smaller market than existed before the conflict.7
Europe offers a parallel signal. ICE Endex TTF front-month gas prices jumped 5% on Monday (2026-08-31) to top 70 euros per MWh after the U.S. and Iran resumed trading strikes, then extended gains to 71.20 euros per MWh on Tuesday (2026-09-01) in Amsterdam morning trade. By Monday (2026-09-14), ICE Endex TTF front-month had settled back to €79.51 per MWh, flat on the session — well below the early-September peak. The contrarian read from European gas pricing is bearish, with macro pressure and demand response moving faster than the supply-disruption headline implies.5
Global Energy Monitor has flagged roughly $107 billion in planned LNG infrastructure investments in the region as potentially at risk. September power and coal burn data from Bangladesh, Vietnam and Pakistan, when published, will indicate whether demand destruction is deepening or stabilising. If coal consumption keeps rising in countries that cannot absorb spot LNG at current JKM levels, the bullish case for prices holding above $24 per MMBtu grows harder to sustain regardless of what happens at Hormuz.2