AI Data Centers Are Driving Southeast Asia's LNG Demand Through the Roof
The artificial intelligence boom is sending Southeast Asia’s natural gas demand projections through the roof – but prolonged price hikes triggered by the war in Iran could turn the region toward renewable energies instead. What is more, these competing market forces are taking place against the backdrop of competing political forces as Southeast Asian leaders try to walk a tightrope between…
The artificial intelligence boom in Southeast Asia is driving up demand for liquefied natural gas (LNG), but rising prices from the Iran war might push the region towards renewable energy. While LNG powers data centers, which are expanding rapidly, political and economic factors create uncertainty for policymakers and industry leaders.
At the Gastech 2026 conference, leaders stressed pragmatism over net-zero goals, urging cooperation to ensure affordable LNG supplies. Singapore already runs on 95% natural gas, while Malaysia, Thailand, and Indonesia's demand is expected to surge. However, solar-plus-battery systems could provide an alternative, given their cost-effectiveness and potential to reduce reliance on fossil fuel imports, particularly as the Strait of Hormuz disruption threatens energy security.
Despite the challenges, the clean energy transition appears to be driven more by economic and geopolitical necessities than climate concerns.
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