Thailand’s long-term bet on gas: LNG dependence rose as domestic fields waned

Our ASEAN Premium database is unlocking granular insights from one of the world’s most dynamic economic regions — especially as the Strait of Hormuz standoff draws attention to local energy vulnerabilities.

A case in point is Thailand. It made a long-term bet on natural gas decades ago due to once-abundant domestic reserves, but became increasingly dependent on Qatari supply.

Natural gas accounted for less than half of the national power-generation mix in 1990. In 2026, that proportion has climbed to almost two-thirds.

Our second chart tracks this evolution over an even longer period. Amid the relentless rise of natural gas, fuel oil and diesel were important power sources through the 1990s; they were displaced by increased use of coal, which still accounted for about one-sixth of the national energy mix until relatively recently.

Among other sources, the share of renewables began growing in the early 2010s and recently surpassed coal. The steadily growing share of imported electricity is also of note: a cross-border grid transmits power from hydroelectric dams in neighboring Laos. (Meanwhile, domestic Thai hydroelectric capacity remains roughly the same as it was in the 1980s, when it had far more relative importance.)

As its domestic gas fields aged, Thailand started importing the fuel in the early 2000s – first, via pipeline from neighboring Malaysia (which jointly administers the Gulf of Thailand’s gas fields, but has depleted its share more slowly).

Then, in 2011, Thailand’s first LNG terminal began receiving vessels from Qatar. The emirate accounted for almost all of Thailand’s gas imports in both value and volume terms as recently as 2017. Malaysia subsequently regained share, and Australia and the US have become important LNG suppliers in the 2020s.

Thailand mostly uses gas to generate power, though demand from the chemical industry and separation plants (which turn gas into other fuels) are also important.

There hasn’t been a gas price shock from the Iran war yet: Thailand paid roughly the same for its imported gas in March as it did in April, as our final chart shows. This has to do with long-term LNG contracts, which cushion buyers from the increasing spot price in the short term.

But this may not be the case for long, potentially posing a threat to state finances. Almost half of the national budget is currently going to shelter consumers via various subsidies — especially gasoline and diesel.