Asia ditches LNG for coal after Iran war sends prices soaring

Asian utilities are boosting coal-fired power generation to cut costs and safeguard energy supply, industry officials say, as the US-Israeli war on Iran chokes liquefied natural gas (LNG) shipments and soaring prices threaten to suppress LNG demand.

Asia spot LNG prices have doubled to three-year highs in the second major supply shock in four years, as shipping through the Strait of Hormuz has all but stopped and No 2 global exporter Qatar has halted shipments.

In South Asia, Bangladesh is increasing coal power generation and coal-fired power imports in March, daily government data shows.

Pakistan aims to further boost power generated from domestic sources after solar additions helped it avoid a repeat of the LNG supply volatility behind widespread outages following Russia’s 2022 Ukraine invasion, according to Power Minister Awais Leghari.

In Southeast Asia, the Philippines is ramping up coal-fired power and slashing LNG-fired output, while Vietnam’s EVN said last week it was negotiating coal supply and Thailand is boosting generation from its ⁠largest coal plant to preserve LNG.