Rising costs and financing risks have hindered more than half of the proposed LNG-to-power projects and import terminals across the Philippines, Vietnam, Thailand, and Bangladesh, according to a report by the Institute for Energy Economics and Financial Analysis (IEEFA).
The report reveals that IEEFA surveyed 92 planned LNG-fired power projects valued at an estimated $109.2 billion, alongside 44 LNG import terminals worth about $21 billion. Of these, 49 LNG-fired power plants and 22 regasification terminals have either been canceled or made little progress from 2021 to 2026, totaling an estimated $67.8 billion in lost value. This cancellation or delay figure is almost 4.5 times greater than the value of projects that were completed in that same period.
Sam Reynolds, co-author of the report and IEEFA Asia’s LNG/Gas Research Lead, stated, “Recent developments in fuel, equipment, and currency markets have exacerbated execution risks for LNG-to-power projects in emerging Asian economies while weakening the revenue certainty needed to secure project financing.” He emphasized that this has resulted in a slower expansion of LNG in the region than expected within the global gas industry.
From 2021 to 2026, only 11% of proposed power generation capacity and 15% of import terminal capacity became operational in the four surveyed markets, reflecting a significantly lower completion rate than previously estimated by IEEFA in 2021.
Completed projects also took over seven years, on average, to become commercially operational, much longer than the typical 3 to 4 years claimed by project developers. Factors contributing to this delay include extreme price fluctuations for LNG, increased capital costs, and longer lead times for gas turbines.
Christopher Doleman, co-author of the report and IEEFA Asia’s LNG/Gas Specialist, noted that the risks could elevate the levelized cost of electricity from LNG-fired power plants by up to 130% compared to estimates from 2021. He pointed out that many development plans relied on outdated assumptions of lower fuel prices and affordable capital costs, which are no longer valid.
Global LNG prices have remained elevated since Russia’s invasion of Ukraine, reaching $27.5 per million BTU in September 2026, nearly three times the pre-conflict levels. Additionally, a global shortage of gas turbines is anticipated to further increase capital costs and delay the construction of LNG-fired power plants in emerging Asia.
The report further highlights specific challenges in each country. In the Philippines, many projects have faced cancellation due to difficulties in securing bankable offtake agreements. In Vietnam, only one LNG-fired power project has commenced operations in the past five years, primarily due to issues with power contract bankability and escalating costs. Thailand has seen more progress in project completion but grapples with underutilization of its gas facilities. Meanwhile, Bangladesh has completed three LNG-fired plants, but high LNG and power expenses are straining government finances and leading to continued gas shortages.
As outlined by Doleman, the investment climate for new LNG-to-power projects is becoming increasingly complicated due to high costs and competition from renewable energy sources. Reynolds concluded that while national circumstances vary, the financial and operational risks for these projects are quite similar across the region.
