South Asia risks $107 billion investment in gas while West Asia war rages: Report
India, Pakistan, and Bangladesh currently account for 17% of all LNG import capacity in development globally
India holds the world’s second-largest planned buildout of LNG terminals and the third-largest pipeline network currently in development. Photo: Wikimedia Commons
Visual Credits: Wikimedia Commons
A massive $107 billion investment in gas infrastructure across South Asia may be built on shaky ground, according to a new report from Global Energy Monitor (GEM). While the region can benefit from an impending global liquefied natural gas (LNG) surplus, high project failure rates and the rapid rise of cheaper renewables threaten to turn these ambitious plans into stranded assets.
The region can become exposed to long-term economic and energy security risks, considering how energy markets are reeling from price spikes following U.S. and Israeli attacks on Iran and renewed shipping disruptions in the Strait of Hormuz.
The report highlighted that India, Pakistan, and Bangladesh currently account for 17% of all LNG import capacity in development globally. India, in particular, holds the world’s second-largest planned buildout of LNG terminals (84.6 million tonnes per annum) and the third-largest pipeline network currently in development (19,635 km). Meanwhile, Bangladesh and Pakistan have proposed enough infrastructure to roughly double their existing import capacities.
However, GEM’s report warned that this demand for gas ignores a decade-long trend of instability. Over the last ten years, South Asian nations have shelved or cancelled two to three times as much LNG capacity as they have actually brought online—a failure rate significantly higher than that of Europe.
Economic and security risks
The urgency of these warnings is underscored by recent geopolitical shocks. The March 2026 energy crisis, tied to conflicts involving Iran and the Strait of Hormuz, has demonstrated that even a balanced market can see prices spike and supplies tighten instantly. For price-sensitive importers like Pakistan and Bangladesh, which were previously shut out of the market during the 2022 Ukraine crisis, these fluctuations are devastating.
The economic case for LNG is also weakening. The International Energy Agency (IEA) noted that emerging economies generally require gas prices between $3–$5/mmBtu (Metric Million British Thermal Unit) to remain competitive against coal and renewables. However, the delivered cost for new export projects typically averaged $8/mmBtu.
As gas prices become more volatile, renewable energy is increasingly outcompeting it.
According to the report, the price of LNG is volatile and expensive enough that it is unlikely to be competitive in the long run against alternatives. With global utility-scale renewables now outcompeting fossil fuels in 91% of cases, South Asia’s pivot toward LNG may be a costly detour in its energy transition.
“We’ve seen this story before, and South Asian economies that import LNG will struggle with these price shocks. It’s a reminder of the risks of building new gas infrastructure, and that domestic alternatives like renewable power are more affordable and reliable in the long run,” said Robert Rozansky, global LNG analyst, GEM.