Room for growth in Southeast Asia?

According to Kpler data, Southeast Asian imports increased by nearly four-fold to 17.3 million t in 2023, from 4.4 million t in 2014. Imports last year constituted 5% of global LNG imports, up from 2% in 2014, the data shows. Thailand and Singapore have been pivotal in driving regional demand given their established demand outlets, ample regasification capacity, and long-term contracts.

Over the next seven years, Kpler expects robust growth in the region’s imports, continuing to be led by Thailand as its domestic gas reserves and pipeline gas imports dwindle amidst rising electricity demand. Singapore is poised to remain the second-largest driver of regional demand, driven by increasing gas consumption and an expanding LNG bunkering industry. Recent start-ups of new LNG terminals in Vietnam and the Philippines, alongside plans for more terminals and gas-fired power plants, signal stronger growth in the coming years, that should be underpinned by long-term contracts.

Thailand: Depleting gas reserves prompt long-run switch towards LNG

Following the opening of Thailand’s 7.5 million tpy Nong Fab LNG import terminal in mid-2022, Kpler data showed that the country’s total LNG imports surged 31% y/y to 8.7 million t in 2022 and 34% to 11.7 million t in 2023. This solidified Thailand’s position as the largest LNG buyer in the region, experiencing an import growth rate of 25%/y since 2014. Thailand previously relied on the 11.5 million tpy Map Ta Phut LNG terminal, operational since 2011, with import volumes reaching approximately 8 million tpy in 2023.

According to Thailand’s state-owned PTT, the company plans to double its total regasification capacity to 30 million tpy by the end of the decade. Kpler expects this capacity expansion to facilitate LNG import growth, supported by falling domestic gas production from Thailand’s ageing fields. In 2020, gas production from the major Erawan field plummeted during a legal dispute between Chevron and the Department of Mineral Fuels surrounding the transfer of gas assets to state-owned PTTEP. Output from Erawan has recovered since July 2023 following the eventual transfer of assets, with plans to ramp up the field’s production to 800 ft³/d in April 2024. PTTEP also announced plans to increase investments that could boost Thailand’s gas output this year, though Kpler projects a probable decline from 2025 as some mature fields continue depleting.

Reduced pipeline imports from neighbouring Myanmar, decreasing from 8.7 billion m³ in 2014 to 5.7 billion m³ in 2023, pose a long-term risk to Thailand’s gas supply. Efforts to sustain output more recently are hampered by a lack of investments by the Myanmar military. Kpler expects a continued decline in imports from Myanmar until 2030, despite potential support from PTTEP to bolster production as a major stakeholder in Myanmar’s Yadana and Zawtika gas fields. Kpler expects LNG to play a pivotal role in diversifying Thailand’s natural gas mix, potentially reaching a 34% share by 2030, up from 32% in 2023.

Domestic gas-for-power demand is also expected to drive imports, aided by new LNG buyers within Thailand. In 2019, Thailand’s state-run utility EGAT made its first LNG import via PTT’s Map Ta Phut terminal under a 4 – 8 year agreement for 1.5 million tpy to supply its gas-fired power plants. In late February 2024, Thai power firm, Hin Kong, also made its debut as an LNG importer after receiving its first cargo via the Nong Fab terminal to supply its power plant in the Ratchaburi province. Thailand has four other licensed LNG importers who have yet to begin imports via the terminal, but some partly have not as they await clearer regulations and much lower LNG prices. Among the licensed firms include Gulf Energy, B.Grimm, and Egco. Besides power, Kpler sees gas demand from the industrial sector growing which could support Thailand’s total gas consumption growth over the next seven years.

Despite high gas prices in recent years, Thailand’s spot LNG demand has surged due to shrinking domestic reserves, weak Myanmar pipeline imports, rising consumption, and limited long-term contracts. Approximately 56% of total Thai imports were spot volumes in 2023 (i.e. 11.7 million t in 2023 minus 5.2 million tpy of long-term contracts), compared to 41% in 2022 and 22% in 2021. PTT’s robust spot demand was also evident through its tender activity, awarding 22 tenders for 121 cargoes in 2023 vs 23 tenders for 59 cargoes in 2022, per Kpler data. Given this relatively inelastic demand, Kpler expects spot volumes to remain supported in the future to meet Thailand’s domestic demand.

Singapore: Growing domestic needs and LNG bunkering expansion

In 2023, Singapore’s LNG imports rebounded by 35% y/y to nearly 5.2 million t as global gas prices eased from record highs in 2022, per Kpler data. The increase was fuelled by the commencement of a new 10-year long-term contract with QatarEnergy for 1.8 million tpy of LNG, allowing Qatar to overtake the US as Singapore’s second-largest LNG supplier for 2023. Australia, meanwhile, remained the top supplier. Since the opening of its first and sole existing 11 million tpy regasification terminal, SLNG, in 2013, Singapore has been importing LNG at an average growth rate of around 21%/y. In February 2024, France’s TotalEnergies and Singapore’s Sembcorp signed a new deal for 0.8 million tpy of LNG for 16 years, starting in 2027.

Kpler forecasts steady LNG import growth for Singapore until 2030, amid plans to build a second 5 million tpy LNG terminal by the end of the decade to strengthen gas security and replace declining pipeline imports. As a small nation with limited energy resources, Singapore has relied on importing natural gas from its neighbours, Malaysia and Indonesia, to meet domestic demand. Though pipeline gas supplies remain sufficient for now and the SLNG terminal is still underutilised, Kpler expects piped gas imports to continue declining and support LNG imports in the coming years.

Kpler sees LNG imports being further supported by growing power and industrial gas demand. Going forward, YTL PowerSeraya’s plans to build a new 600 MW combined cycle gas turbine by the end of 2027 to boost Singapore’s gas-fired power generation capacity. According to the Energy Market Authority, Singapore’s gas consumption has increased at an average annual growth rate of 1.8% over the past 10 years, with 83.4% of gas supply used for power generation and 14.7% for industrial demand in 2022.

More recently, the Singapore government plans to establish a single gas buying entity – Gasco – in 2024 to help centralise purchases in the power sector to protect against future gas supply shortfalls and volatile electricity prices. The plan was in response to record global gas prices in 2022, which led to a decline in LNG imports due to an aversion to costly gas purchases by utility companies. Kpler expects the new gas entity could help encourage more gas buying from the power sector in the long term.

A growing portion of Singapore’s imports are expected to meet the increasing demand for LNG bunkering. Plans to build a second terminal will help promote such LNG-related services as Singapore aims to be a major LNG bunkering and trading hub in the region. According to Singapore’s Maritime and Port Authority, LNG bunkering volumes jumped from 16 000 t in 2022 to 110 000 t in 2023. Leveraging Singapore’s strategic location and strong maritime infrastructure, the country often re-exports a portion of its total imports. Kpler data show that the country re-exported about 13% of its imports on average over the last decade – mostly to bigger Northeast Asian buyers.

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