Southeast Asian LNG demand to jump 16%

• Rapid data centre expansion in Southeast Asia is projected to drive 16% annual liquefied natural gas growth through to 2035.
• The research points to expanded supply opportunities for Australian natural gas exporters targeting regional infrastructure hubs.
• Renewable energy cost advantages in South Asia are expected to exclude natural gas from baseload data centre power agreements.

Soaring energy consumption from regional computing facilities will drive 16% annual growth in Southeast Asian demand for liquefied natural gas through to 2035, according to energy research consultancy Wood Mackenzie.

This multi-decade growth trajectory compares to South Asia, where cheap solar and wind generation is expected to completely lock out gas power from data centre development.

"These are large, creditworthy offtakers with power needs that remain stable regardless of economic cycles," said Wood Mackenzie Principal Analyst Fadhlullah Omarali.

Southeast Asia’s data centre capacity is projected to expand from 2.8 gigawatts today to 9.4 gigawatts by 2035, lifting computing electricity demand from 17 terawatt hours to 57 terawatt hours.

Following the announcement, major exporter Woodside Energy (ASX:WDS) shares were down 1.21% at $32.08.

Wood Mackenzie stated that gas power generation remains the most viable technology to provide round-the-clock baseload power in Southeast Asia due to grid-scale battery storage remaining commercially immature.

In contrast, Indian data centre growth is expanding fivefold to 12 gigawatts, but hyperscalers have signed over 33 gigawatts of renewable power purchase agreements instead of natural gas contracts.