Asia’s gas demand rose 35 percent from 2015 to 2023, with China contributing more than 90 percent of net growth, while declining domestic supply has forced a rapid shift toward higher-cost imported liquefied natural gas, increasing strategic and financial risk for energy-intensive industries, according to a new data tool from Institute for Energy Economics and Financial Analysis.
Power generation remains the largest consumer of natural gas, but industrial users have driven most incremental demand since 2015, followed by chemicals and fertilizers.
Falling gas use in Japan, India, Indonesia, Malaysia, Vietnam, and the Philippines has offset gains elsewhere, excluding China.
Domestic gas production is declining across most of Asia, with only China and Malaysia showing sustained growth. Reserve depletion is approaching in the Philippines, Thailand, and Bangladesh, tightening supply security and increasing exposure to imported fuels.
China has already exceeded its 2030 domestic production targets, strengthening its relative bargaining position in regional gas markets.
Fourteen major Asian markets spent USD177.6 billion on LNG imports in 2023, nearly double 2015 levels, excluding Hong Kong, Indonesia, and Vietnam. Australia has been the largest LNG supplier to Asia since 2015, followed by Qatar, Malaysia, the United States, and Russia, while the regional share of US and Australian cargoes has increased and Qatar’s has declined.
Asia’s LNG imports are down 6 percent through October 2025, with US-sourced volumes falling in China, Japan, South Korea, Taiwan, and Thailand despite political pressure to increase purchases. This contraction signals tightening demand elasticity and rising sensitivity to price and policy risk.
The shift from low-cost domestic gas to LNG is elevating long-term infrastructure risk, raising fuel input costs, and increasing vulnerability to commodity price volatility.
In several markets, domestic gas has historically been produced below USD5 per MMBtu, with subsidized industrial users in some countries paying below USD2, while spot LNG prices hover near USD12, compressing industrial margins and weakening competitiveness.
Supply-side constraints and higher import dependence are likely to slow future gas demand growth, particularly in power generation and heavy industry, while clean energy alternatives and cheaper pipeline gas could further limit LNG demand growth in China amid ongoing trade tensions.
The findings are based on a new interactive report launched by the Institute for Energy Economics and Financial Analysis, which consolidates official government data across 14 Asian economies to standardize analysis of sectoral gas consumption, production, LNG imports, and pricing.
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