As energy markets reel from price spikes following US and Israeli attacks on Iran and renewed shipping disruptions in the Strait of Hormuz, South Asia’s planned expansion of LNG infrastructure could expose the region to long-term economic and energy security risks, according to a new report from Global Energy Monitor (GEM).

Data in the Asia Gas Tracker show that India, Bangladesh, and Pakistan have US$107 billion in LNG terminals and gas pipelines that have been announced or are under construction. Southern Asia accounts for 17% of global LNG import capacity under development (110.7 million tpy) and 17% of global gas pipelines by length (34 146 km).

Bangladesh and Pakistan each have enough LNG import capacity in development to roughly double existing capacity, while India is pursuing the world’s second-largest LNG terminal capacity expansion and the third-largest gas pipeline buildout.

Yet despite expectations of a global LNG glut later this decade, GEM finds that even in a relatively balanced LNG market, disruptions to shipping routes and production can quickly raise delivered prices and tighten access. These factors suggest gas is unlikely to be competitive in the long run against alternatives, potentially weighing down the growth of emerging economies that build around it.

All three countries are price-sensitive LNG importers with a history of project cancellations. Over the past decade, India, Bangladesh, and Pakistan have shelved or cancelled two to three times as much LNG import capacity as they have brought online. Proposed import terminals in Southern Asia exhibit materially higher failure rates than comparable projects in Europe.

The war in the Middle East lays bare just how quickly a growth market can sway into an affordability crisis and up the potential likelihood of project shelving or stalling.

At the same time, renewable power is already outcompeting gas in India and Pakistan’s power sectors, and alternative solutions like green hydrogen can wean the region off of relying on gas imports for industry. Solar generation in Pakistan has more than tripled in three years, while India is on track to meet over 40% of electricity demand with renewables by 2030. Energy storage solutions are improving, making inroads in Asia, and can offer grid flexibility eroding gas’ assumed role in peaking and balancing.

Robert Rozansky, global LNG analyst for Global Energy Monitor, said: “We’ve seen this story before, and South Asian economies that import LNG will struggle with these price shocks. It’s a reminder of the risks of building new gas infrastructure, and that domestic alternatives like renewable power are more affordable and reliable in the long run.”

Read the article online at: https://www.lngindustry.com/special-reports/12032026/south-asia-exposed-to-us107-billion-lng-bet-as-middle-east-war-rages/

MidOcean Energy has entered into definitive agreements with JERA Co., Inc. to acquire JERA Gorgon Pty Ltd, which holds JERA’s 0.417% interest in the Gorgon LNG project.

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