LNG

Rising LNG prices are feeding through to wholesale electricity markets. To mitigate exposure, utilities in Thailand and Vietnam are shifting from purely index‑linked LNG contracts toward structures with price caps and multi‑year tenures, covering up to 80% of their projected LNG-fired power plant needs.

Fitch Ratings has revising down EBITDA margins for global corporates to below 18%, down 0.5pp from forecasts in early 2025. For the oil & gas sector, Fitch changed its outlook from ‘neutral’ to ‘deteriorating’ after the rating agency already cut its global GDP growth projections in April due to the uncertainty surrounding US tariffs.

Southeast Asia is expected to become a net LNG importer by 2032, with demand set to soar approximately 182% over the next decade. Wood Mackenzie forecasts the region’s gas demand will outpace both oil and coal, particularly in Malaysia, Thailand, the Philippines and Vietnam.

Greater utilisation of India’s fleet of gas-fired power plants could accelerate LNG imports to bridge the gap left by marginal domestic gas production increases, the International Energy Agency (IEA) finds. Supportive policies by the Indian government could tilt the national power gen mix more towards cleaner-burning natural gas and hydrogen in the coming years.

LNG demand in Japan’s power sector is expected to rise by more than 10% to about 74 million tons by 2040, the government forecasts factoring in a slow build-out of renewables. Unless wind and solar power capacity expands substantially, or the cost of hydrogen and ammonia falls sharply – Japan’s gas demand is bound to increase.

The TTF needs to price higher at around €57/MWh for the balance of 2025– if European buyers want to succeed in attracting flexible LNG cargoes, as inventories are depleting fast. Reduced Norwegian pipeline gas flows could propel up TTF prices, analysts warn, as Europe lost its ability to further minimise power-sector gas demand.

Turkey’s incumbent gas importer BOTAS has issued a tender for delivery of five LNG cargoes in the first quarter of 2025 that will support the supply and demand balance in the EU gas market this winter. Analysts caution, however, Egypt’s new FSRU poses upside risk to non-European demand.