Thailand’s natural gas business outlook (2025–2026): Revenue declines amid weakening demand

• Thailand's natural gas business revenue is expected to decline in 2025 and 2026, driven by the projected contraction in both Pool Gas prices and natural gas demand. Pool Gas prices are expected to decrease by 3.7% and 5.2%, respectively, following the downward trend in natural gas prices from the Gulf of Thailand.
• Meanwhile, Thailand's natural gas demand is projected to contract by 3.8% in 2025 and 3.0% in 2026. The power generation sector is expected to consume less gas due to rising electricity imports and increasing reliance on renewable energy. Demand in the transportation sector (NGV) is also set to continue declining, in line with the persistent drop in the number of CNG vehicles.

Natural gas business revenue is expected to decline in 2025 and 2026.
Revenue of natural gas producers and importers is expected to contract by 7.4% and 8.1%, respectively, due to…

Pool Gas prices are expected to decline by 3.7% and 5.2% in 2025 and 2026 (Figure 2).

Pool Gas prices are calculated based on a weighted average of natural gas prices from the Gulf of Thailand (Gulf Gas), Myanmar Gas, and imported liquefied natural gas (LNG) (Figure 3). In 2025, the Pool Gas price is expected to be lower than in 2023 due to the restructuring of the natural gas pricing system implemented in May 2024. Under this new structure, the Pool Gas price decreases as the petrochemical sector shifts from using Gulf Gas prices to partially adopting the Pool Gas price.

In 2025, Pool Gas prices are expected to decline due to lower Gulf Gas prices, which will follow the downward trend in Dubai crude oil prices. The decline will also be pressured by higher natural gas supply from the Gulf of Thailand, as production is expected to operate at full capacity throughout the year.

However, Pool Gas prices also face upward pressure from the expected increase in average LNG import prices, which are projected to rise in line with Henry Hub and JKM (Japan-Korea Marker) natural gas prices. This upward trend is driven by tighter supply conditions in the United States, coupled with surging LNG demand in Asia during the first quarter, which has resulted in lower gas inventory levels.

In 2026, Pool Gas prices are expected to decline further, as Gulf Gas prices continue to fall in line with Dubai crude oil prices. In addition, average LNG import prices are also expected to decrease, following the projected decline in the JKM benchmark, driven by the expansion of global LNG supply. Moreover, Thailand's planned LNG imports from the United States under long-term contracts—negotiated as part of adjustments related to Trump-era tariffs—will help reduce reliance on spot LNG purchase (priced against Henry Hub), which is typically more expensive.

Thailand's natural gas demand is projected to decline by 3.8% and 3.0% in 2025 and 2026, respectively (Figure 4).

Natural gas consumption in Thailand can be categorized into three markets: the power generation sector, the industrial sector, and the transportation sector (NGV) (Figure 5). The outlook for natural gas demand is analyzed as follows:

1. The power generation sector is expected to contract in 2025 and 2026 (Figure 6).

Natural gas demand for power generation is expected to decline by 7.2% in 2025, driven by rising electricity imports and increased use of renewable energy—particularly hydropower, which is projected to expand as higher water levels result from the La Niña phenomenon (Figure 7).

In 2026, natural gas demand from the power generation sector is expected to contract by 3.9%, as hydropower generation is projected to decline due to lower water levels, compared to 2025.

2. Industrial natural gas demand is expected to increase in 2025 and decline in 2026 (Figure 8).

In 2025, industrial natural gas demand is expected to grow by 2.9%, supported by the increase in raw gas supply from the Erawan field to gas separation plants for ethane production, in response to increasing demand from the petrochemical industry.

Industrial natural gas demand is projected to decline by 1.5% in 2026, in line with the expected slowdown in petrochemical demand due to constrained household consumption and limited overall economic growth. In addition, competition from Chinese petrochemical products is also expected to weigh on demand.

3. Natural gas demand in the transportation sector (NGV) is expected to decline by 15.6% and 7.5% in 2025 and 2026, respectively (Figure 9).

This decline corresponds with the continuous reduction in the number of CNG (Compressed Natural Gas) vehicles (Figure 10). In fiscal year 2025, the total number of CNG vehicles decreased to 215,908 units, down from 370,666 units in 2019. The downward trend is further reinforced by the decline in the number of NGV service stations, as operators increasingly shift their focus toward generating revenue and profit from non-NGV businesses. As a result, the role of NGV has clearly diminished.

The gross profit per unit for natural gas producers and importers is expected to decline by 9.5% and 7.4% in 2025 and 2026, respectively.

This is due to higher costs, driven by the expected increase in average natural gas import prices, as LNG imports replace lower-cost gas from Myanmar, which is currently facing supply constraints (Figure 11).

Thailand's natural gas imports are expected to contract by 14.0% in 2025 and increase by 5.2% in 2026 (Figure 12).

Thailand currently imports natural gas from Myanmar and LNG. In 2024, imports from Myanmar accounted for around 28%, while LNG accounted for 72% of Thailand's total natural gas imports.

Of the LNG imported, 70% is spot LNG, while the remainder is sourced through long-term contracts, which currently exist only with Qatar and Malaysia (Figure 13). Thailand's high reliance on spot LNG stems from the declining trend in natural gas imports from Myanmar, as well as the fact that negotiating long-term LNG contracts typically takes 2–3 years. The latest contract is the long-term LNG import agreement with the United States, which will begin in 2026.

1. Thailand's natural gas imports from Myanmar are expected to decline in 2025 and 2026 (Figure 14). Imports from Myanmar are projected to fall by 20.1% in 2025 due to the depletion of major gas fields—such as Yadana and Zawtika—and the lack of new investments, largely driven by ongoing political instability in Myanmar. In 2026, the decline in Myanmar gas imports is expected to moderate to 5.4%, supported by planned drilling of new gas wells in the Yadana and Zawtika fields.
2. LNG import volumes are expected to contract in 2025 and expand in 2026 (Figure 14).
   In 2025, LNG imports are forecast to decline by 11.7%, reflecting weaker natural gas demand in Thailand and increased gas output from the Erawan field, which is expected to operate at full capacity throughout the year. In 2026, LNG imports are projected to increase by 8.8%, driven by the commencement of deliveries under a new long-term LNG import contract with the United States, which was established through negotiations related to Trump-era tariffs.

Medium- to long-term risks for Thailand's natural gas industry

• The draft PDP 2025 indicates a potential reduction in the share of natural gas used for power generation, which is expected to fall below 41%, as compared with the target stated in the previous draft plan (PDP 2024). This adjustment aligns with Thailand's revised Net Zero target, which has been moved forward from 2065 to 2050. As of January–August 2025, the share of natural gas used for power generation stood at 54.8% (Figure 7).
• Domestic natural gas supply is expected to decline, leading to increased reliance on LNG imports. The reduction in domestic gas supply is driven by the aging of major gas fields such as Erawan and Bongkot. The domestic supply outlook could change if negotiations progress on the Thailand–Cambodia Overlapping Claims Area (OCA), which contains natural gas resources. However, energy-related discussions in the area have been delayed due to border tensions and the temporary closure of checkpoints between Thailand and Cambodia in mid-2025.
• The uncertainty surrounding natural gas imports from Myanmar poses risks to supply stability. The Yadana and Zawtika gas fields in Myanmar are approaching the end of their concession terms, expiring in 2028 and 2044, respectively. Combined with ongoing political instability in Myanmar, these factors heighten the risk of disruptions or reductions in the volume of gas supplied to Thailand.
• LNG receiving and regasification terminals may be insufficient to accommodate rising LNG import volumes in the future. Although Thailand is investing in the expansion of LNG terminals—such as Map Ta Phut and Nong Fab—any delays in infrastructure expansion could ​create bottlenecks in gas handling and lead to supply shortages during periods of high demand.

• The restructuring of Pool Gas pricing will affect gas costs across different sectors, depending on government policy regarding the reference price for each sector. For instance, if the government seeks to reduce fuel costs for the power generation sector, it may adjust the Pool Gas pricing structure to lower the reference price for that sector, while shifting other sectors to use LNG import prices—which are higher.
  
  

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