SINGAPORE, 6 Apr 2022 – A wave of new fossil fuel infrastructure worth more than US $350 billion is sweeping across Asia, tripling the scale of comparable projects planned in Europe. The build-out includes liquefied natural gas terminals, pipelines, and gas-fired power plants, and has reignited debate over how long the world’s most populous region should rely on fossil fuels.
Governments from Beijing to Manila argue that the new gas capacity will allow them to retire older coal-fired units and reduce local air pollution. The logic is straightforward: burning natural gas produces roughly half the carbon dioxide emissions of coal, and gas turbines can be ramped up quickly to complement grids that are adding variable renewable sources such as wind and solar. However, analysts caution that any pipeline or regasification terminal approved today could still be operational in 2050, well past the United Nations’ target date for global net-zero emissions.
“These assumptions are outdated or will be long before the end of a 20-year LNG contract,” said Robert Rozansky, research analyst at Global Energy Monitor, the non-profit organization that compiled the project list as of June 2021. If all proposals are completed, global LNG import capacity would increase by 50 percent, locking customers into carbon-intensive fuel for decades and diverting capital from renewables and storage solutions.
China is leading the charge with 30 LNG import terminals under construction and another three dozen in planning stages, the largest single-country build-out tracked by BloombergNEF. State planners view gas as a bridge to President Xi Jinping’s pledge that national emissions will peak before 2030, but critics argue the scale of investment suggests the bridge could become permanent. Some within China have questioned whether provincial giants such as Guangdong Energy and State Power Investment are inflating demand projections to protect market share.
“There definitely is a role for gas, and particularly in displacing coal,” Mark Carney, UN Special Envoy on Climate Action and Finance, told the Asia Sustainable Finance Forum in Seoul last month. “But we always need to keep in mind the ultimate horizon for any source of energy given its carbon footprint.” Carney’s caution reflects a growing consensus that unabated gas must decline sharply after 2030 to keep the planet within the Paris Agreement’s 1.5 °C ceiling.
The war in Ukraine has upended the economic case for gas. Spot LNG prices in Asia hit a record US $84 per million British thermal units in March, up from less than US $10 a year earlier, with forward curves showing double-digit prices persisting into 2024. Cash-strapped importers such as Vietnam’s PetroVietnam and the Philippines’ First Gen Corporation have delayed final investment decisions, citing “unfinanceable” costs.
Japanese trading houses are backing away from long-term contracts unless sovereign guarantees are attached, and China’s central planners have told state utilities to slow non-essential purchases to avoid energy-price driven inflation. South Korean conglomerates are marketing new LNG terminals as dual-use assets that can later handle hydrogen.
POSCO Energy, SK E&S, and Korea National Oil Corp argue that converting import infrastructure to ammonia or hydrogen will protect against stranded-asset risk when climate policy tightens. Engineers note the switch requires separate cryogenic tanks, different piping alloys, and upgraded safety systems, retrofits that can cost more than building from scratch. “Repurposing sounds attractive in boardroom slides, but the technical and regulatory hurdles are enormous,” said an official at Korea’s energy ministry who asked not to be named because the review is ongoing.
The UN Environment Programme warned in November that current national pledges place Earth on a 2.7 °C pathway, and the International Energy Agency calculates that global gas demand must fall 10 percent this decade to keep 1.5 °C alive. Diplomats preparing for the COP27 summit in Egypt say they will press Asian governments to strengthen 2030 targets and outline how new gas infrastructure aligns with net-zero by mid-century.
Private financiers are also under pressure: Citigroup and HSBC have promised tighter methane-emission standards for gas loans, though both remain lead arrangers for several terminals now reaching financial close. Asia’s US $350 billion dash for gas illustrates the tension between immediate energy security and long-term climate stability. Cleaner than coal, the fuel still emits carbon and its infrastructure can last half a century—time the planet does not have. Unless governments embed sunset clauses, carbon capture, or conversion plans from day one, today’s import terminals risk becoming tomorrow’s stranded monuments to a missed opportunity.
