Southeast Asia's Gas Buildout Stalls as War Cuts LNG Import Forecast by Nearly 60%
Wood Mackenzie has slashed its Asian LNG import outlook to 5 million metric tons from 12.4 million, putting $107 billion in regional power infrastructure at risk.
JKM front-month Asian LNG was trading at $21.26/MMBtu on Tuesday (2026-08-11), sustaining pressure on Southeast Asian power utilities already struggling to reconcile ambitious grid expansion targets with the supply and price constraints created by the Iran conflict. Wood Mackenzie has cut its forecast for Asian LNG imports to roughly 5 million metric tons from 12.4 million tons, a reduction of nearly 60%, assuming a two-month disruption to Middle East supply.1,6
That revision cuts directly into the region's long-term grid plans. ASEAN's 2030 energy agenda envisioned gas-fired capacity reaching nearly 200 GW, almost double the current installed base of 106 GW. The buildout relied on sustained, affordable LNG access through supply routes now compromised by the closure of the Strait of Hormuz and the halt in Qatari exports. Global Energy Monitor estimated that roughly $107 billion in planned regional infrastructure investments are at risk.2,1
Lucas Schmitt, an analyst at Wood Mackenzie, said the conflict will significantly reduce Asian LNG demand growth in 2026. High prices and supply uncertainty are likely to curb that growth across the region even after an eventual resolution, analysts said.1
The International Energy Agency quantified the underlying exposure in a report released on Tuesday (2026-06-16). Southeast Asia's energy import bill is projected at $160 billion this year. Without faster diversification, the IEA warned, that figure could nearly triple to $245 billion by 2035 from the $80 billion the region spent in 2024. The mid-century projection, under current policy settings, is $400 billion, roughly 5% of the region's projected economic output.4,3,5
"Diversification of energy sources and supply routes is now a central priority," said Fatih Birol, the IEA executive director. The agency characterised the Iran war as a wake-up call, pointing to Southeast Asia's overreliance on oil and gas transported through a narrow set of maritime corridors from a limited number of suppliers.4,5
The supply shock is already redirecting generation decisions on the ground. Bangladesh has increased coal-fired power generation and is importing coal-based electricity, government data show. Asian utilities more broadly are turning to coal to manage rising energy costs and lock in supply, industry officials said.1
Indonesia is taking a different approach. The country is placing greater emphasis on accelerating solar deployment alongside selective gas development, Wood Mackenzie said, responding to the combined pressure of high LNG prices and strategic supply risk. Energy Tracker Asia estimated that solar could save ASEAN up to $67 billion as LNG prices surge, a number that carries growing weight in regional grid investment decisions.6,2
But the duration of the conflict is the variable that undermines any fixed planning assumption. Wood Mackenzie's 5 million metric ton LNG import floor rests on a two-month disruption. A longer suspension of Qatari exports or an extended closure of the Bab el-Mandeb passage would compress that floor further, deepen the coal reversion visible in Bangladesh's generation data, and put more of the $107 billion in at-risk infrastructure into indefinite hold.1,2