LNG Prices Double After Strait of Hormuz Blockade

LNG prices in Southeast Asia have doubled to $20.80 per MMBtu after the blockade of the Strait of Hormuz. Before the current Gulf conflict, prices ranged from $10 to $12 per MMBtu. The increase has raised costs for imported natural gas across the region.

The Asian Development Bank lowered its regional growth forecast from 5.1% to 4.7%. Higher energy prices are affecting multiple economic sectors. Governments are responding by increasing purchases of renewable energy equipment.

Valerio, Philippine Country Director at New Energy Nexus, said the region's fossil fuel model depends on imports and long supply chains. She spoke at the 48th ASEAN Summit in Cebu. Renewables reduce exposure to global supply disruptions, she added. Weekly inquiries for rooftop solar in the Philippines have increased more than 500% since the crisis began.

Firm solar-plus-storage systems now cost $54 to $82 per megawatt-hour, according to the International Renewable Energy Agency. New coal plants cost $70 to $85 per megawatt-hour and new gas-fired plants exceed $100.

Adhiguna, Managing Director of the Energy Shift Institute, noted that Japan continues to promote LNG agreements in Southeast Asia through its Asia Zero Emission Community initiative. Japanese utilities hold long-term contracts for LNG from the U.S. and Australia.

Some of this supply is being directed toward the region. Rex Amancio of the Global Renewables Alliance said policymakers should invest in grid infrastructure and storage. The Philippines has announced a 10-year plan to procure 25 gigawatts of renewable capacity.

Officials are discussing an ASEAN Power Grid to share domestic surpluses in real time.