Kartik Selvaraju and Prateek Pandey of Rystad Energy report that Southeast Asia’s gas sector anticipates substantial growth, with projected gas resources set to rise to 58 trillion cubic feet (Tcf) by 2028, marking a three-fold increase from levels observed in the past five years. They write:
Offshore gas production in Southeast Asia is poised to unlock a $100 billion potential, driven by a flurry of planned final investment decisions (FIDs) expected to materialize by 2028, according to Rystad Energy’s latest analysis. This represents a more than twofold increase over the $45 billion worth of developments that reached FID from 2014 to 2023 and signals a surge for the region’s offshore gas industry. The upcoming period of rapid growth is bolstered by deepwater projects, recent successful discoveries in Indonesia and Malaysia, and positive carbon capture and storage (CCS) advancements, which will be crucial in meeting the region’s sanctioning agenda in the years ahead.
Oil and gas majors are expected to drive 25% of these planned investments through 2028, while national oil companies (NOCs) will account for a 31% share. Notably, East Asia’s upstream companies are emerging with a 15% share and show potential for growth through their focus on mergers and acquisition (M&A) opportunities and upcoming exploration ventures. The role of majors could further expand to 27% following TotalEnergies’ substantial acquisition efforts in Malaysia.
Discussions among Southeast Asian countries have focused on the future of domestic developments and limiting their dependence on gas imports. Energy security and the transition to gas as a fuel have become growing concerns for governments in the region. To address the energy trilemma – balancing energy security, energy equity and environmental sustainability – countries can prioritize utilizing domestic resources for gas development while crafting policies and incentives that promote sustainable practices and enhance regional energy security.
Despite the region’s promising future for offshore gas development, persistent project delays remain a concern. Deepwater and sour gas economics, infrastructure readiness and regional politics have caused widespread delays, some of which have been ongoing for over two decades. However, the emergence of CCS hubs in Malaysia and Indonesia could be a game-changer. […]
These economic realities have sparked discussions on revising domestic gas pricing policies across the region. Notably, a gas price of $7.5 per thousand cubic feet could potentially make up to 95% of planned developments economically viable, especially those associated with LNG projects in Indonesia and domestic supply initiatives in Vietnam. Supply chain companies could also see increased value for floater-based projects and deepwater drilling, adding motivation for them to facilitate this offshore gas renaissance that is on the cards for the region. As stakeholders navigate these market conditions, the region’s offshore gas sector appears poised for significant growth, supported by strategic investments and evolving economic conditions.
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