Southeast Asia is emerging as a major new LNG demand centre as hyperscale data centres drive a surge in power consumption, while India’s renewables-led electricity system leaves gas largely shut out of the boom.

 

The region’s data centre expansion is set to create sharply divergent prospects for natural gas, according to new research from Wood Mackenzie.

 

Southeast Asia’s data centre capacity is projected to more than triple from 2.8 gigawatts (GW) today to 9.4 GW by 2035. Electricity demand from those facilities is expected to jump from 17 terawatt-hours (TWh) to 57 TWh over the same period.

 

The growth is particularly significant for LNG because data centres require reliable, around-the-clock power. Combined-cycle gas turbines (CCGTs) remain the most viable large-scale technology capable of meeting that requirement, while grid-scale battery storage is not expected to be commercially mature enough across much of the region until the mid-2030s.

 

Md Fadhlullah Omarali, principal analyst at Wood Mackenzie, said, “ what makes data centre demand interesting from an LNG perspective is the counterparty profile. These are large, creditworthy off-takers with power needs that remain stable regardless of economic cycles. That does change the risk of calculus for new supply into Southeast Asia.”

 

The opportunity varies significantly by country, with Singapore, Malaysia and Thailand emerging as the biggest potential beneficiaries for LNG suppliers.

 

Singapore’s power grid already runs on approximately 95% gas. As a result, almost every additional megawatt of data centre capacity translates directly into additional gas demand.

 

With piped gas imports from Malaysia and Indonesia expected to end by the early 2030s, Singapore’s dependence on LNG is expected to reach 100%.

 

Malaysia and Thailand offer even greater room for growth. Both markets face declining domestic and piped gas supplies, increasing the need for LNG to fuel new gas-fired power generation.

 

Malaysia has 3.9 GW of data centre capacity under development, while new regasification terminals are being built to support rising electricity demand.

 

Thailand presents a similar opportunity. Around two-thirds of its electricity grid is already gas-fired, and LNG is expected to account for more than half of gas supply by 2035 as production from the Gulf of Thailand and pipeline imports from Myanmar decline.

 

Indonesia’s Batam is also emerging as a key third hub in the Singapore-Johor-Riau (SIJORI) corridor. More than 450 MW of data centre capacity is in the pipeline, backed by strong government support. But unreliable power delivery remains a critical constraint.

 

"Malaysia and Thailand are at a turning point. Data centre investment is growing quickly just as domestic gas output peaks and declines." Omarali added. "New import infrastructure is being developed and the importer base is broadening. For LNG suppliers with volumes to place, this timing is important."

 

India presents a starkly different picture.

 

The country’s data centre market is forecast to expand fivefold to almost 12 GW by 2035, making it the second-largest in Asia Pacific. The sector is expected to attract an estimated US$145 billion in investment between 2024 and 2030.

 

But for LNG suppliers, that explosive growth offers little opportunity.

 

LNG-fired power generation costs two to three times more than renewable energy paired with battery storage in India, making gas economically uncompetitive as a baseload power source for data centres.

 

Gas currently contributes less than 2% of India’s electricity generation and is expected to remain around that level through the outlook period, with coal and renewables continuing to dominate the power mix.

 

Pipeline infrastructure gaps across major data centre corridors in southern, central and eastern India add another obstacle to gas-fired generation.

 

The clearest signal comes from the hyperscalers themselves: none has announced gas-backed power supply agreements. Meanwhile, commercial and industrial renewable power purchase agreements have already surpassed 33 GW of contracted data centre capacity.

 

In other words, India’s data centre boom is enormous—but LNG is unlikely to capture it.

 

Pakistan and Bangladesh face an even tougher outlook. Persistent load-shedding, unreliable grids and macroeconomic pressures are constraining data centre development and discouraging hyperscale investment.

 

The result is a widening regional divide: Southeast Asia’s data centre expansion is creating a structural new source of LNG demand, while South Asia’s growth is increasingly being powered without gas.