Lots more gas: Philippines and Thailand are interested in purchasing Russian LNG

The Philippines is interested in purchasing Russian liquefied natural gas. This issue will be discussed during the upcoming visit of the republic's delegation to the Russian Energy Week in October, Igor Bailen, the country's ambassador to the Russian Federation, told Izvestia. Thailand has also expressed interest in supplies, but fears secondary sanctions, Izvestia found out. In addition, Manila allows the construction of small nuclear reactors in the country with the help of Russia's Rosatom. However, due to the concern of Southeast Asian countries over Western restrictions against Russia, Moscow is unlikely to be able to significantly increase energy supplies to the region, experts say.

The Philippines is negotiating with Russia

Manila is interested in supplying Russian liquefied natural gas, the Philippine Ambassador to Russia, Igor Bailen, told Izvestia.

— I was in Manila last week, and one of the people I met with was our energy minister. We discussed the potential of energy cooperation between the two countries. And, of course, the Philippines, especially our Ministry of Energy, recognizes the importance of Russia as an energy source, as an energy supplier, and we briefly discussed nuclear energy, its peaceful uses, as well as other aspects," the Philippine diplomat said.

The ambassador also expressed the country's interest in small nuclear reactors produced by Rosatom. It is possible that Manila will launch the construction of such energy facilities with the mediation of the Russian side.

— For the Philippines, as for other developing countries, ensuring the sustainability of our energy mix in the long term is a priority. We are negotiating this issue with all partners, including Russia. And, of course, we know that Russia's Rosatom is a leader in the field of small nuclear reactors. The Philippines is keeping an eye on them," said Igor Bailen.

According to the diplomat, the issues of LNG supplies and the discussion of cooperation in the nuclear energy sector will be discussed by the parties at the upcoming Russian Energy Week in October. Discussions on this topic will also be held at the St. Petersburg International Economic Forum in June, if the Philippine delegation is able to attend it.

Another country in the region, Thailand, is showing interest in Russian LNG supplies. This was reported to Izvestia by the kingdom's ambassador to the Russian Federation, Sasivat Vongsinsavat.

— Yes, we are still interested in energy resources. Because Thailand actively imports liquefied natural gas and coal. But the fact is that we need to find a very good way to transport them to the country. At the same time, we must find a way to deal with secondary Western sanctions," the Thai ambassador said.

He added that negotiations had already been held between the companies of the two countries on the supply of LNG and coal to Thailand, but so far this has not happened.

Against the background of geopolitical changes and a reduction in gas exports to Europe due to sanctions and sabotage on the Nord Streams, the countries of Southeast Asia are becoming a key destination for Russian supplies of liquefied natural gas (LNG). The region, where demand for energy resources is growing faster than in other parts of the world, demonstrates a growing interest in Russian gas, opening up new opportunities for cooperation.

According to a study by Reksoft Consulting, by 2030, LNG imports to Southeast Asia may increase 2.4 times, to 53.5 million tons, from 22.9 million tons in 2024. The main drivers will be Vietnam, the Philippines and Thailand. Hanoi plans to increase purchases to 7-12 million tons by 2030, which is facilitated by active cooperation with Gazprom in the oil and gas sector, including the construction of power plants. The Philippines intends to increase purchases to 9.5 million tons. Thailand, which already imports 10.3 million tons of LNG, may increase volumes to 16.1 million tons by 2030 due to the diversification of energy sources.

In general, by the end of 2024, Asia became the second buyer of Russian LNG after Europe. The main importers were China and Japan. However, recently, Southeast Asian countries have increasingly shown interest in supplying Russian energy resources: in addition to Thailand and the Philippines, we are talking about Vietnam, Indonesia and Malaysia.

Dynamics of LNG demand in the region

The consumption of liquefied natural gas in Southeast Asian countries continues to grow rapidly. In 2024, the demand of the region's states for imported LNG reached 270 million tons, and, according to forecasts, this figure may double by 2050.

In recent years, Qatar and Australia have been the main suppliers of LNG to Southeast Asia. However, due to the rapid growth of energy consumption in the region, it is likely that the main suppliers of natural gas may face difficulties in maintaining the necessary supply volumes, and therefore some countries are interested in finding new exporters.

Despite the fact that Russia is considered as a potential supplier of LNG to the region, countries such as Thailand and the Philippines are in no hurry to conclude a contract for the supply of Russian energy resources. The main reason is the fear of falling under secondary sanctions, says Igor Yushkov, a leading analyst at the National Energy Security Fund and an expert at the Financial University under the Government of the Russian Federation.

— Despite offers from Russia to buy LNG at great discounts, Southeast Asia, which, unlike China, is very sensitive to American restrictions, cannot afford to violate them. Thus, until the sanctions are lifted, Russia, unfortunately, will not be able to increase LNG supplies to the world market, in particular to Southeast Asia," he told Izvestia.

According to Yushkov, this region remains a promising market for Russian LNG. However, from an economic point of view, it is more profitable for the Russian Federation to focus on the European market, where transportation costs are significantly lower.

The result is already making itself felt. The EU continues to increase purchases of liquefied natural gas from Russia: in January, its imports exceeded €1 billion for the first time in two years. This is the maximum volume since January 2023. France accounted for almost half of all purchases (amounting to €455.2 million). Spain is in second place (€261.5 million). Belgium closed the top three with €256.7 million.