OPINION : "Lessons in Gas and LNG Governance: Opportunities and Challenges in Asia"

Amid growing geopolitical uncertainties, trade wars, and the global energy transition, one of the strongest messages I took away from the presentation by Sam Chua (Partner, Rystad Energy Advisory Asia-Pacific) at The 5th IndoPACIFIC LNG Summit 2026 in Bali was that the coming decade will be the "decade of LNG in Emerging Asia."

However, this significant opportunity will only be captured by countries capable of supplying LNG that is affordable, deliverable, and supported by investment strategies that move faster than those of their competitors.

A Major Shift in Global LNG Demand

Over the past two decades, global LNG demand growth has been dominated by Japan, South Korea, and China. That landscape is now changing.

According to Rystad Energy's projections, approximately 85% of global LNG demand growth through 2035 will come from Emerging Asia, particularly India, Bangladesh, Pakistan, Vietnam, the Philippines, Thailand, and Indonesia. Meanwhile, demand in Japan and South Korea is expected to stagnate or even decline as a result of energy efficiency improvements and decarbonization efforts.

China's LNG demand continues to grow, but at a slower pace than in previous years, driven by increasing domestic gas production, pipeline gas imports, and renewable energy development. This indicates that the center of gravity of the global LNG market is gradually shifting from East Asia toward South and Southeast Asia.

LNG Demand Expected to Peak Around 2039

Rystad Energy's presentation indicates that global LNG demand will continue to increase until approximately 2039, before beginning to level off. What makes this projection particularly interesting is not merely the increase in volume, but the countries driving that growth.

While China previously served as the primary engine of LNG demand growth, the next decade will see that role shift toward emerging economies that continue to require affordable energy to support industrialization and economic development.

A New Wave of Supply Will Reshape Market Competition

On the supply side, the LNG market is expected to experience a new wave of additional supply beginning around 2028, primarily from the United States and Qatar.

These two countries are projected to account for approximately 80% of additional global LNG supply during the initial phase of expansion. As a result, the market is expected to enter a period of "temporary oversupply."

The implications are relatively clear. Asian LNG prices are expected to face downward pressure for several years before rising again after the mid-2030s. For LNG buyers, this period presents an opportunity to secure long-term contracts at competitive prices. For producers, however, it will be a critical period in which cost efficiency could determine the commercial viability of LNG projects.

Price Will Be the Deciding Factor

One of the most interesting findings from the presentation was that LNG demand in Emerging Asia is highly sensitive to price. According to Rystad's analysis, significant additional demand will only materialize if delivered LNG prices reach approximately US$7/MMBtu or lower.

If prices remain substantially above this level, many developing countries may choose to continue relying on coal or petroleum-based fuels, or postpone their transition to natural gas.

In other words, gas must not only be available. It must also be affordable. This presents a major challenge for high-cost LNG projects.

Southeast Asia Will Become Increasingly Dependent on LNG

Nearly all Southeast Asian countries are experiencing a similar pattern. Domestic gas production continues to decline, while electricity and industrial demand continue to rise.

As a result, dependence on LNG imports is expected to increase.

Thailand

Thailand is projected to more than double, potentially nearly triple, its LNG imports as domestic gas production in the Gulf of Thailand declines.

LNG contracts with suppliers from Qatar, the United States, and Malaysia, along with spot market purchases, are expected to become key sources of supply to meet the country's energy needs.

Vietnam

Vietnam has set highly ambitious targets for developing LNG-fired power plants.

However, implementation continues to face several obstacles, including delays in terminal construction, limited turbine availability, and unresolved Power Purchase Agreements (PPAs).

In other words, the underlying demand already exists, but the necessary infrastructure is not yet ready.

Indonesia

Perhaps the most surprising case is Indonesia. Rystad projects that Indonesia is also entering a phase in which production from mature gas fields is declining while domestic demand continues to increase, creating a growing need for additional LNG supply.

The charts presented indicate that the gap between domestic supply and demand will begin to widen after the mid-2030s. Ironically, Indonesia has long been one of the world's largest LNG producers.

Yet without major new gas discoveries and accelerated development of strategic projects such as the Abadi Field in the Masela Block, Indonesia Deepwater Development (IDD), the Andaman Block, and other gas fields, Indonesia could gradually shift from being an LNG exporter to becoming an increasingly significant LNG importer.

Japan Is Moving Faster

Perhaps the most important aspect of Rystad's presentation was not its outlook on prices or demand, but rather the landscape of Japanese investment across Asia.

Japanese companies and institutions, including Tokyo Gas, Mitsubishi, Mitsui, Marubeni, JERA, and JBIC, have already established strategic positions across nearly the entire Asian LNG value chain.

They are not merely purchasing LNG. They are investing in import terminals, Floating Storage and Regasification Units (FSRUs), power plants, gas distribution networks, and even equity stakes in LNG projects across various countries.

In other words, Japan is investing in the future of Asia's LNG market. By the time demand rises significantly in the coming years, Japanese players will already be firmly embedded within the region's LNG ecosystem.

Lessons for Indonesia

For Indonesia, the message from this presentation is clear. Having substantial gas reserves alone is not enough. Gas reserves do not automatically translate into economic prosperity.

What matters is how quickly projects can be developed, how competitive their production costs are, how predictable the regulatory framework is, and how attractive these projects are to global investors.

The period of temporary oversupply beginning in 2028 should instead be seized as an opportunity to advance and complete Indonesia's national LNG projects before the market tightens again after the mid-2030s.

Rystad Energy concluded its presentation with a particularly compelling statement:

"Affordability and early strategic positioning will decide who captures Emerging Asia's LNG decade."

I see this statement as more than a market forecast. It is a warning that countries that move faster will be the ones to gain control of Asia's LNG value chain.

Conversely, countries that are slow to make decisions risk becoming merely markets for LNG supplied by others. Indonesia still has significant opportunities through Masela, IDD, Andaman, and various other gas projects.

However, these opportunities will not wait. In the energy industry, time is often more valuable than the gas reserves themselves.

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Bogor, after Duha prayer

Thursday, August 6, 2026