Natural gas has long been framed as the backbone of Thailand’s energy system. For decades, domestic production—particularly from the Gulf of Thailand—has underpinned electricity supply, supported industrial growth, and been perceived as a stable fuel in the country’s energy mix. 

Today, however, Thailand stands at a pivotal junction. Declining domestic output, rising reliance on imported liquefied natural gas (LNG), and mounting price volatility have reshaped the energy landscape in ways that carry profound economic and social consequences. 

Two recent publications from the Project Clean, Affordable and Secure Energy for Southeast Asia (CASE) highlight structural risks in Thailand’s current gas trajectory and outline a more resilient path forward. 

Gas dominates the power sector—and that dominance is set to continue 

Thailand is currently revising its long-term energy strategy to deliver clean, affordable, and secure energy, while aligning national action plans with its carbon-neutrality  and net-zero greenhouse gas emissions goal by 2050. However, some gaps remain between existing national energy plans and carbon-neutral pathways. 

In 2023, natural gas accounted for around 60% of fuel use in electricity generation, reflecting its central role in the power sector. Both in the context of energy security as well as climate goals, reducing reliance on natural gas will be an important consideration for Thailand’s long-term decarbonisation strategy. 

The current draft Power Development Plan (PDP) maintains a high gas pathway. By 2037: 

• Gas is projected to account for 41% of electricity generation. 
• Gas demand in the power sector remains roughly at today’s level. 
• An additional 6,300 MW of gas-fired capacity is expected to come online between 2028 and 2037. 

This trajectory contrasts with global net-zero pathways analysed by the International Energy Agency (IEA), where gas demand declines significantly under carbon-neutral scenarios. Thailand’s official planning could result in continued reliance on long-lived gas infrastructure through the 2040s and 2050s, creating potential carbon lock-in. 

Evaluating the Risks: Thailand’s Natural Gas Crossroads 

The first and perhaps most structural risk identified in “Thailand’s Natural Gas Crossroads: Strategic Risk Mitigation for a Carbon-Neutral Era” is carbon lock-in. Thailand’s continued expansion of gas-fired power generation—combined with increasing reliance on LNG imports—could embed fossil fuel dependence into the energy system for decades to come.  

Gas-fired power plants are long-lived assets, typically operating for 20–25 years under long-term power purchase agreements (PPAs). Expanding gas capacity today could lock Thailand’s power sector into a carbon-intensive pathway well beyond its carbon-neutral target. While PPAs and long-term gas supply contracts are designed to provide revenue certainty and reduce investor risk, they can also limit system flexibility if cleaner and more cost-competitive alternatives emerge. 

The continued reliance on gas and LNG imports presents trade-offs across the energy trilemma: increasing import dependence affects energy security, higher tariffs raise affordability concerns, and long-term fossil infrastructure may constrain progress toward environmental sustainability goals. 

Deep Dive into LNG 

Over the past decade, LNG imports have expanded rapidly, driven by declining domestic gas production and reduced pipeline flows from Myanmar. At the same time, gas demand remains structurally high, particularly in the power generation sector and across energy-intensive industries. This widening gap between constrained domestic supply and sustained demand is embedding LNG as an increasingly central component of Thailand’s energy system.  

In parallel with these developments, LNG imports increased more than sevenfold between 2014 and 2024¹, and are projected to account for nearly 50% of total gas supply by 2030, up from less than 30% in 2024. Although global oversupply and relatively low prices may offer short-term relief, deeper import dependence carries structural risks—including pressure on the trade balance and greater exposure to external shocks such as climate disruptions, geopolitical tensions, and rapid technological change—potentially heightening financial, macroeconomic, and socio-economic vulnerabilities. 

While the market may face periods of oversupply and relatively buyer-friendly prices in the coming years, this should not create complacency. Beyond market fundamentals, several structural risks persist: 

• The global LNG market is inherently cyclical (a boom–bust cycle), with periods of oversupply and buyer-friendly prices followed by phases of tight supply and higher prices.
• Increasingly severe climate change impacts heighten vulnerabilities across LNG import infrastructure (e.g., cyclone damage to Bangladesh’s FSRU), critical transit corridors (e.g., drought-related constraints at the Panama Canal), and maritime trade routes where climate stress compounds geopolitical instability (e.g., rerouting disruptions in the Red Sea).  
• Geopolitical tensions and international conflicts (such as disruptions to key shipping routes) heighten price risks and energy security concerns for LNG-importing countries. 
• LNG import demand in Europe approaching 2030 could exceed forecasts, tightening spot markets and raising prices for Asian buyers. 
• Emerging structural factors could also reshape the global LNG market. These include rising energy demand linked to accelerated AI deployment, as well as cost pressures on the supply side (such as higher taxes and liquefaction fees in the United States), which could drive prices higher and constrain long-term supply. 

A Three-Pillar Framework for Managing Risk 

Given the structural risks associated with rising LNG dependence, a balanced and forward-looking policy response will be essential. Rather than focusing solely on expanding supply, Thailand’s strategy could benefit from a broader framework that both mitigates near-term risks and supports long-term decarbonisation objectives. In this context, CASE’s policy brief Rethinking LNG: Safeguarding Thailand’s Energy Security Amid Heightened Risks proposes a three-pillar approach that can help guide risk management:  

• The first pillar focuses on system-wide transformation to gradually reduce long-term reliance on LNG and natural gas. This includes accelerating renewable energy deployment, enhancing grid flexibility, strengthening demand-side management, and reassessing capacity expansion plans to avoid overbuilding gas infrastructure that may become underutilised over time. 

• The second pillar addresses exposure to international LNG market volatility during the transition period. As long as LNG remains a key component of the energy mix, risk management measures will be important. These may include prudent contracting strategies, diversification of supply sources, improved transparency in pricing mechanisms, and safeguards to limit excessive cost pass-through to consumers. 

• The third pillar emphasises domestic reforms within Thailand’s LNG value chain. As new terminals and import facilities are developed, careful consideration of appropriate scale, operational efficiency, and governance will be critical. Transparent, rules-based market structures can help ensure fair competition, minimise inefficiencies, and align infrastructure development with realistic demand projections. 

Accelerating Thailand’s energy transition presents both opportunities and challenges. Structural constraints—including long-term gas supply contracts, existing LNG and power infrastructure, system integration considerations, and ongoing institutional reforms—will inevitably shape the pace and sequencing of change. Managing these constraints carefully is essential to maintain system reliability, affordability, and investor confidence. 

At the same time, the findings of Thailand’s Natural Gas Crossroads and Rethinking LNG: Safeguarding Thailand’s Energy Security Amid Heightened Risks indicate that continued structural growth in LNG dependence carries material economic and strategic risks. Importantly, the reports do not call for an abrupt exit from natural gas or LNG. Instead, they advocate a managed and strategic realignment. 

This realignment involves gradually reducing structural LNG demand through accelerated renewable deployment, grid modernisation, and energy efficiency improvements; actively managing short-term exposure to global LNG market volatility; reforming the domestic gas market to prevent overcapacity and stranded assets; and redefining energy security around resilience, flexibility, and decarbonisation rather than continued fossil fuel expansion. 

Taken together, the reports point toward a balanced and forward-looking pathway — one that recognises existing constraints while steadily aligning Thailand’s energy system with long-term economic stability, energy security, and climate objectives. 

Explore the full reports:  

Rethinking LNG: Safeguarding Thailand’s Energy Security Amid Heightened Risks: https://caseforsea.org/post_knowledge/rethinking-lng-safeguarding-thailands-energy-security-amid-heightened-risks/ 

Thailand’s Natural Gas Crossroads: Strategic Risk Mitigation for a Carbon-Neutral Era: https://caseforsea.org/post_knowledge/thailands-natural-gas-crossroads-strategic-risk-mitigation-for-a-carbon-neutral-era/ 

1. Energy Policy and Planning Office (EPPO), 2025.  ↩︎