Data Dive - A breakdown of gas and LNG demand in Asia

About

This interactive data tool provides detailed insights into natural gas and liquefied natural gas (LNG) demand across 14 Asian economies shown in the map below.

It relies primarily on official government sources — converted to equivalent units and standardized categorizations — to analyze sectoral gas consumption (Section 1) and natural gas production trends (Section 2), as well as LNG imports, annual LNG spending, and average import prices (Section 3).

Since natural gas is used as a fuel or a feedstock in various applications throughout Asia, understanding the sectoral drivers and barriers to demand growth can be complex. While not intended to provide a comprehensive demand forecast, this tool provides insights into near-term challenges that may affect natural gas and LNG growth in key sectors (Section 4). The final section (Section 5) discusses the potential impacts of lower LNG prices on demand.

Please see the downloadable file here for a detailed methodology, including expanded citations and references. The press release is available here.

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Key findings

Section 1: Natural gas demand in Asia

• Asia’s natural gas consumption increased 35% between 2015 and 2023. China accounted for over 90% of this increase, as gas demand in the country more than doubled over the period. Gas demand also increased by more than 30% in India, South Korea, and Taiwan.

• Total gas demand fell in five countries by a combined 31.3 billion cubic meters (bcm), with Japan accounting for 70% of the decline. This was enough to offset demand growth elsewhere in the region, excluding China and India.

The following two charts show natural gas demand by sector in each country surveyed. The first includes sectoral categorizations standardized by IEEFA, while the second shows more specific sectors reported by each country.

• The power sector is currently the region’s largest consumer of natural gas, but demand differs significantly among individual markets. Over 50% of gas demand is concentrated in the power sector in Japan, Taiwan, Hong Kong, Singapore, Thailand, the Philippines, Vietnam and Bangladesh.

• On the other hand, China, India, Indonesia, and Malaysia report nearly 40% to 65% of their natural gas demand in the industrial sector, which includes manufacturing, refining, iron and steelmaking, cement production, mining, agriculture, and other subsectors. Bangladesh, Thailand, South Korea, Pakistan, Japan, Singapore, and Taiwan also report between 10%–30% of demand in the industrial sector.

• The use of natural gas in the residential and commercial sector (hereby referred to jointly as buildings) is limited to countries with expansive pipeline distribution networks, including China, Japan, South Korea, Pakistan, Hong Kong, and Bangladesh. Contrastingly, the Philippines, Vietnam, Thailand, and Indonesia lack the infrastructure for widespread household consumption, as gas grids have primarily been established for larger end-users. India has targets to significantly expand residential and commercial gas connections, though progress remains behind targets.

• The transport sector only accounts for a significant share of total gas demand in India and China. India primarily uses compressed natural gas (CNG) for three-wheelers, city buses, passenger cars and taxis, and light commercial vehicles. Meanwhile, China uses LNG in liquid form for heavy-duty trucking. CNG plays a minor but declining role in Thailand.

• In India, natural gas is primarily used in fertilizer production, transportation, and the manufacture of ceramics, glass, and other products. In China, natural gas is mainly consumed in residential heating and cooking, fertilizer production, and manufacturing. Claims that LNG can displace coal consumption in China and India downplay the fact that natural gas plays a minor role in power generation, where most coal usage occurs.

• Although the power sector is currently the largest end-user of gas in the region, the industrial sector has accounted for the largest volume of growth since 2015. This is largely attributable to China’s infrastructure and real estate expansion, increasing demand for materials production and export-driven manufacturing output. Similar drivers have boosted industrial gas demand in India, South Korea, Indonesia, Malaysia, Vietnam, and Bangladesh.

• The fertilizer and petrochemical sectors have accounted for the second-largest increase in natural gas demand since 2015 among markets surveyed. China’s gas usage for chemicals increased 37 bcm between 2015 and 2023, while the next largest increase was in India, where demand in fertilizers/petrochemicals rose by 4 bcm between 2015 and 2024. Other countries, including South Korea, Malaysia, Thailand, and Vietnam, experienced smaller increases by volume.

• The buildings sector accounted for a large volume of growth over the period, though growth was almost entirely concentrated in China and, to a lesser extent, in South Korea and India. Declining demand in Japan’s buildings segment — due to demographic trends and energy efficiency gains — was enough to offset increases throughout the rest of Asia, excluding China.

• Gas demand in the power sector grew considerably in China, South Korea, Taiwan, Hong Kong, Singapore, and Bangladesh, along with smaller increases in Thailand and Pakistan. Drivers include electricity demand growth, the commissioning of new gas-fired power plants, coal-to-gas switching policies in South Korea, and nuclear retirements in Taiwan, among many other factors.

• On the other hand, power sector gas demand shrank compared to 2015 levels in Japan, India, Indonesia, Malaysia, Vietnam, and the Philippines. Japan’s demand has fallen steeply in line with nuclear restarts and renewables deployment. Declines in India, Vietnam, the Philippines, and Indonesia were due largely to uncompetitive prices, gas supply limitations, and/or government prioritization of non-power sectors for gas allocation.

• Gas demand growth in the transport sector has been driven almost entirely by China and India. Chinese gas use for transport grew by more than 50% between 2015 and 2023, and over sixfold in India from 2016 to 2025. Transport gas demand is lower compared to 2015 in Japan, Thailand, Pakistan, South Korea, and Malaysia.

• Notably, few government data sources distinguish between the end-use of domestically produced natural gas, pipeline gas imports, and imported LNG. However, India’s LNG demand growth has come almost entirely from fertilizers due to government subsidies that shield end-users from volatile fuel and production costs, while other segments have relied mainly on cheaper domestically produced gas.

Section 2: Natural gas production in Asia

• Domestic gas production is declining throughout Asia, with the notable exceptions of China and Malaysia. In India, production peaked in 2010, and despite an uptick in recent years, the outlook remains challenging. Declining gas production is widely cited as a major LNG demand driver, as countries aim to replace domestic output with seaborne imports. Depletion of natural gas reserves is imminent — less than 10 years at current production rates — in the Philippines, Thailand, and Bangladesh.

• Production declines throughout South and Southeast Asia are due to various factors, including maturing gas fields, expansion into more geologically challenging and expensive reserves, limited discoveries, pricing negotiations, geopolitical tensions, political instability, and notable withdrawals by global oil and gas majors.

• By contrast, increasing domestic production in China is primarily due to concerted government policies prioritizing energy self-sufficiency and the development of unconventional gas resources. In 2024, China produced 246.4 bcm of gas, exceeding a 2030 target of 230 bcm six years ahead of schedule. Domestic production growth and pipeline imports from Russia and Central Asia have constrained China’s demand for more expensive LNG imports.

   

• Due to extreme volatility and high prices in global LNG markets, most countries in the region are exploring options to reinvigorate domestic production. Investment in upstream natural gas production in Southeast Asia is expected to increase from USD5 billion in 2021 to over USD30 billion in 2027, driven largely by offshore deepwater plays. While upstream projects in the region have historically required breakeven prices of below USD4 per million British thermal units (MMBtu), newer offshore projects may require prices between USD6–7.5/MMBtu, though reliance on carbon capture, utilization, and storage (CCUS) would likely add costs.

• Of the markets surveyed, China, Hong Kong, Singapore, and Thailand import pipeline gas from neighboring countries. Malaysia and Indonesia export pipeline gas to Singapore, and China sends pipeline gas to Hong Kong. While China’s pipeline imports from Russia and Central Asia may dampen its future LNG requirements, Thailand’s LNG demand may rise if pipeline imports from Myanmar continue to fall. Pipeline exports from Indonesia and Malaysia are also expected to decline further, increasing pressure on Singapore’s LNG imports.

Section 3: LNG imports in Asia

• Between 2015 and 2024, Australia supplied the largest volume of LNG to the 13 countries included in this report, followed by Qatar, Malaysia, the United States (US), and Russia. Over this period, the share of Australian and US LNG in Asia has increased, while the share of Qatari LNG has fallen.

• These trends vary across Asia. Qatar remains the dominant supplier in South Asia due to geographic proximity and cheaper delivered costs, while the share of Qatari LNG has fallen in Northeast Asia from 26% to 13%. This is partly due to falling Japanese imports, which have dropped in line with lower gas demand and the expiry of several large, fixed destination contracts with Qatar.

• In 2025, the share of US LNG in the region is significantly lower than in previous years despite political pressure to import American products. China halted US LNG imports entirely in March 2025, and Chinese buyers are diverting shipments elsewhere. US LNG imports have also fallen across the region — including Japan, South Korea, Taiwan, and Thailand — illustrating that prices remain the key driver of near-term LNG flows, not politics.

• Russia’s share of LNG in the region was 5% in 2024 and has remained flat since 2015. Declining Russian LNG imports in Japan and South Korea have been offset by higher purchases by China, where Russian LNG volumes have increased from 0.20 million tonnes per annum (MTPA) to 7.1 MTPA. In 2024, China was the largest buyer of Russian LNG, followed by France, Japan, Spain, and Belgium. Russian LNG supplies to South and Southeast Asia remain marginal.

• A country’s annual LNG import bill denominated in local currency will vary according to global market prices, demand, pricing benchmarks, foreign exchange rates, and other factors. The Institute for Energy Economics and Financial Analysis (IEEFA) surveyed customs data from 11 countries to assess annual LNG import costs. In 2023, the most recent year for which customs data was available in each market, these countries spent USD177.6 billion, down from USD224.2 billion in 2022 but nearly double the amount paid in 2015.

• Average import prices per million British thermal unit (MMBtu) are shown below for select countries, alongside the Japan-Korea Marker (JKM), a benchmark for Asian spot market prices.

• Average prices paid by importers can vary depending on exposure to various pricing benchmarks, contractual flexibilities, fuel switching ability, and many other factors. Due to rapid declines in domestic production and pipeline imports, Thailand paid an average price of USD25/MMBtu in 2022, over 2.5 times the country’s average LNG cost a year earlier. 

• Conversely, in China, with lower gas demand due to strict COVID-19 containment policies and cheaper alternatives, buyers and traders could divert LNG cargoes to other regions. As a result of this flexibility, China was able to play the role of global balancer and pay among the lowest average LNG prices in Asia in 2022. 

• In 2022, higher LNG prices pushed Japan’s fossil fuel import bill to its highest level, demonstrating that while the country’s LNG procurement strategy prioritizes long positions and supplier diversity, it cannot guarantee affordability.

• With domestic production declining across most countries, Asia is undergoing a transition from an energy system reliant on lower-cost, domestically produced gas to one dependent on more expensive LNG imports. 

• Domestic gas production and pipeline trade tend to be cheaper than LNG due to liquefaction, transportation, and regasification costs. For example, Thailand’s average price of offshore gas production has remained slightly above USD5/MMBtu. In the Philippines, the oil-linked price of offshore gas from the Malampaya field has averaged USD8.78/MMBtu over its lifetime. Associated gas production in Vietnam is priced around USD1–1.25/MMBtu, while the cost of developing dry gas fields has been around USD5/MMBtu or more for proposed offshore projects. In Pakistan, the average wellhead price of domestic gas production is between USD3.50–4/MMBtu. Indonesian gas piped to Singapore and Malaysia has been priced at USD6/MMBtu. China’s domestic gas and pipeline imports are estimated to cost roughly USD5/MMBtu and USD8–9/MMBtu, respectively. 

• By contrast, wholesale gas prices in highly LNG-dependent markets like Japan and South Korea are typically between USD11–15/MMBtu.

Section 4: Risks to gas and LNG demand growth in Asia

Although this data tool does not provide a detailed outlook for future gas and LNG demand in Asia, this section outlines some significant barriers to demand growth in key end-use sectors that may be overlooked in industry forecasts and media reports. It also discusses the potential impacts of falling LNG prices on regional LNG demand.

Section 5: What if LNG prices fall?

Based on projects already under construction, global LNG export capacity is expected to grow by 193 MTPA between 2025 and 2028, a 40% increase. The rapid supply growth is likely to put downward pressure on global prices later this decade, though some forecasts suggest market tightness could resume as early as 2031.

Falling prices will likely boost short-term LNG demand in Asia, particularly among price-sensitive end-users in emerging markets. For example, industrial users in India have demonstrated elastic demand, switching to oil-based fuels and natural gas liquids when LNG prices rise. Similarly, Chinese buyers may sell flexible cargoes into the domestic market rather than pursue arbitrage opportunities elsewhere. LNG could become more competitive with oil-based fuels in both marine and road transport. LNG truck sales in China are highly sensitive to LNG and diesel prices.

However, lower LNG prices may not alleviate several long-term, structural barriers to rapid demand growth.

First, demand in Japan and South Korea’s mature markets is set to fall in line with long-term energy and climate plans. Demand in these wealthier Asian markets, including Taiwan and Singapore, is highly inelastic, so lower prices may not elicit a demand response.

Second, most LNG producers face breakeven liquefaction and delivery costs that may remain uncompetitive with alternative resources in importing markets. For example, LNG production and shipment from the US to Asia is widely estimated to cost between USD8–11/MMBtu (though this is rising, as discussed below). While market prices may temporarily fall below this level due to oversupply, breakeven production costs should serve as a long-term anchor for prices, ensuring producers can recover operational and investment costs. However, emerging Asian economies would likely need prices between USD3–5/MMBtu for LNG to be competitive with renewables and coal.

Third, lower LNG prices would likely remain higher than the historical costs of domestically produced gas in many Asian economies. Consequently, end-users may still face higher fuel costs due to the shift from domestic to imported gas. For export-oriented industries in the region — many of which were established on domestic gas costs below USD5/MMBtu — this change may continue to undermine regional competitiveness compared to markets with lower-cost, localized energy inputs. Falling LNG prices may temporarily assuage these concerns, but do not eliminate long-term investment risks associated with high imported fuel costs, energy supply chain vulnerability, and extreme volatility inherent to LNG markets.

Fourth, LNG demand growth faces mounting barriers in Asia’s power sector, historically the largest gas consumer in the region. Extensive delays for gas and LNG-related infrastructure, exacerbated by global gas turbine shortages, present a structural limitation on importers’ ability to respond to lower prices. Meanwhile, the deployment of low-cost renewables is undercutting the need for large LNG volumes and pushing gas-fired power plants into mid-merit and peaking roles.

More flexible operations complicate gas generation and fuel requirements, making it challenging to commit to long-term take-or-pay contracts that have historically underpinned financing for LNG supply chain investments. Global gas turbine shortages will exacerbate gas-to-power project delays, creating more renewables growth opportunities and hindering LNG requirements. Pakistan, for example, is now experiencing a domestic glut of gas supplies and looking to sell excess LNG, as renewables growth has reduced the need for gas-fired generation. In China’s Guangdong province, which hosts over a third of the country’s gas capacity, a recent overhaul in the payment scheme for gas plants may reduce utilization hours to accommodate higher renewables output.

Finally, the ability to take advantage of lower prices will depend on each buyer’s exposure to various pricing benchmarks. Oversupplied spot markets may benefit importers with fewer long-term offtake commitments. Buyers with traditional oil-indexed contracts may benefit from falling oil prices through 2026, though long-term forecasts anticipate rising crude prices over the longer term. On the other hand, US buyers with Henry Hub-linked contracts could see higher prices in the coming years. Many expect Henry Hub prices to continue increasing amid higher US gas demand and relatively flat production, while liquefaction fees from US export facilities are rising in accordance with material and labor costs. Therefore, buyers currently negotiating LNG deals with US suppliers risk locking in higher prices even as markets tilt into oversupply.

Read the press release: IEEFA’s new Data Dive reveals the drivers, barriers, and costs of Asia’s gas and LNG demand