What is natural gas?
Natural gas – often simply described as ‘gas’ – is a fossil fuel that is widely used around the
world for a range of essential purposes like cooking, heating and power generation.
Natural gas is highly valued for power generation as the cleanest burning fossil fuel, particularly
in Asia where more than 50 per cent of electricity still comes from coal.
Natural gas is a mix of gaseous hydrocarbons, formed when layers of organic matter decompose and are subjected to intense heat and pressure underground over millions of years. It is found in rock formations below the Earth’s surface and under the ocean.
Natural gas was first used as an energy source thousands of years ago but its use in electricity generation dates back to the late 1930s. Natural gas is often converted into LNG which can be exported for use in international energy production.
What is the current energy situation in Asia?
Many nations in Asia are still heavily reliant on coal for power generation. Some of the region’s most highly populated countries – including China, India, Indonesia and the Philippines and – generate more than 50 per cent of their electricity for coal.
Countries across Asia have long-term strategies built around renewable energy. But with energy demand set to grow strongly for several decades, there is a pressing need for an affordable and reliable fuel that can ensure progress on climate targets while that demand is met. Natural gas is very well suited to this role.
What makes natural gas a good fit for Asia?
Using natural gas instead of coal for power generation reduces emissions by 50 per cent on average, according to the International Energy Agency. Using gas rather than coal in electricity production also has air quality benefits.
Gas offers a highly reliable source of baseline power production that balances intermittency issues associated with widespread implementation of renewable energy.
What will happen if Asia doesn’t transition away from coal?
Asia is already home to more than half the world’s people and many of its populations are growing rapidly. So too are their economies and associated energy demand. If the majority of Asia’s power generation continues to come from coal, the region will not meet its emission reduction targets and the world will likely miss its timeline to achieve net zero by 2050.
What are some of the challenges in Asia using natural gas?
Only 9 per cent of the world’s proved natural gas reserves are in Asia. Some countries in the region have no gas resources of significance. Others have gas fields that are in decline or depleted. For this reason, much of the Asia’s gas supply – current and future – must come from liquefied natural gas (LNG) imports, shipped from outside the region.
One of the challenges for Asia is the price of LNG. The ability of emerging economies to access LNG is price-dependent and often impacted by global market forces, Russia’s invasion of Ukraine being a prime example. When LNG became unaffordable after the invasion, emerging Asian nations leaned heavily into coal-fired power generation and/or simply cut some power production, which was disruptive to industries and communities.
Gas production and its use in electricity generation comes with an emissions profile that can be addressed through innovations like carbon capture and storage (see more details below).
How is gas currently used in Asia?
Gas is used in Asia for power production and as an industrial feedstock in essential industries such as steel, cement, chemical and fertiliser manufacturing.
Where is gas being used in Asia?
Asia accounted for 69% of global LNG imports in 2024, with three countries – Japan, South Korea and China – having the largest import capacity in the world. Japan and Korea are long-term, high-volume importers of LNG, which is essential to their energy security. LNG has more of a niche role in China, where it is used to support growing uptake of renewable energy and to help drive down air pollution and emissions where there has been heavy coal use.
A wide range of countries across Asia – including India, Indonesia, Malaysia, the Philippines and Vietnam – have identified natural gas as a fuel to support emissions reductions from power generation. India, the Philippines and Vietnam, in particular, will rely on LNG imports to achieve this.
Singapore: a case-study of a gas-based economy
Once powered by oil, Singapore started shifting to gas-powered electricity generation in the early 2000s and hasn’t looked back. Today, more than 92 per cent of Singapore’s electricity needs are met by natural gas, a situation that is enabling the country to be bold with its efforts to expand renewables capacity (solar) and explore alternative fuels (like hydrogen).
Singapore imports gas via pipeline from Malaysia and Indonesia but has greatly expanded LNG imports over the past five years. Singapore is expected to use gas for electricity for decades to come.
Where does Asia source its gas from?
Within Asia, the two biggest gas-exporting countries are Indonesia and Malaysia, both of which rank in the top-15 in the world. Asia’s major sources of LNG for many years has been Qatar and Australia, the latter of which supplied 30 per cent of volumes in 2023. More recently, the US has emerged as a significant source of LNG for Asia.
Continued production from major gas-producing nations is critical to meeting Asia’s long-term energy needs.
Are there ways gas production and use can be less carbon-intensive?
ANGEA’s member companies continue to invest in technology and innovation that lowers their carbon footprint. This includes use of renewable energy to help power operations, the development of alternative fuels (such as ammonia) to decarbonise LNG shipping and continual improvement of methane detection and mitigation along the gas supply chain. One of the most promising growth areas for the gas sector is the rapid advancement of carbon capture and storage (CCS) – a technology that means emissions from the production of natural gas are captured and then either placed into permanent storage or used in other forms of industrial processing.
CCS is similarly emerging as a technology to support emissions reductions from gas-fired power plants. Ever-increasing efficiency of these power plants, as turbines and other technology evolve, also helps reduce their carbon footprint.
What is ANGEA’s role with natural gas?
ANGEA’s membership consists of the biggest companies throughout the global natural gas and energy supply chain. We work with governments and industries across Asia to help ensure they can access affordable and secure supply of low-carbon gas, to serve as a critical fuel as the region works to reduce emissions.
Natural Gas FAQs
Is Natural Gas A Fossil Fuel?
Yes, like oil and coal, natural gas is a fossil fuel. Like other fossil fuels, it’s formed when layers of organic matter like plants, animals and microorganisms decompose and are subjected to intense heat and pressure underground over millions of years. It is found in rock formations below the Earth’s surface and under the ocean.
Why Is Natural Gas called an “Ideal fuel”?
Natural gas produces fewer emissions, particularly of carbon dioxide (CO2) than other forms of fossil fuel. Because of this, it’s often suggested as an alternative to coal and oil, which are still prominently used for energy production. Natural gas is very suitable for energy production in Asia, as countries aim to reduce their emissions and transition to cleaner alternatives.
What is Natural Gas used for?
Natural gas has a range of uses. Most commonly it is:
- Used as a fuel source for generating power or electricity.
- Domestically, used as a fuel for cooking and heating.
- Used as a key ingredient when manufacturing things like polymer or fertiliser.
Are LNG and Natural Gas The Same?
LNG stands for liquified natural gas and is produced from natural gas. LNG can be transported safely to countries where it’s used to generate power and by industry.
