How Asia Is Boosting Global Natural Gas Consumption

Jul 25, 2025

Consumption of natural gas is jumping globally, driven by demand in Asia, where the fuel is becoming one of the main sources powering AI data centers and taking share in the transportation sector.

Key Takeaways

  • Demand for natural gas is likely to grow at an annual rate of 5% in Asia, faster than in Europe and the U.S. 

  • Asia is expanding consumption of natural gas as the region is likely to host more than one third of AI data centers globally and become one of the biggest markets for electric vehicles.

  • With better infrastructure, lower prices and more natural gas in the energy mix, Asia can reduce annual energy costs by $200 billion by 2030.

  • Liquified Natural Gas (LNG) could add $60 billion in trade between the U.S. and Asian nations this decade. 

  • The region’s dependence on U.S. natural gas could more than double this decade and reshape supply chains for energy consumption across sectors.

After decades of slow growth, natural gas consumption is picking up as it’s viewed as a dependable and affordable fuel for powering everything from automobiles to humanoids, biogenetics to AI data centers and semiconductor production.

 

The momentum comes mainly from Asia, where Morgan Stanley Research expects natural gas demand to grow at an annual rate of about 5% through 2030, compared with about 1% for Europe and 3% for the U.S. This shift has broad implications. The region’s dependence on U.S. natural gas could more than double this decade and reshape supply chains for energy consumption across sectors. 

 

“Consumption of natural gas will rise much quicker than most fuels for the rest of the decade, making it more than just a transition fuel,” says Mayank Maheshwari, who leads Morgan Stanley’s energy and utilities coverage in India and Southeast Asia. “Natural gas has become the backbone to energy security and has an essential role in fulfilling the world's insatiable electrification needs, which have more than tripled in the last half decade.”

 

Asia is likely to host more than a third of the world’s AI data centers, which require more power because AI-related tasks can consume 10 times more electricity than regular internet searches.  

 

The electrification of manufacturing and transportation is also boosting demand for energy. China is already the global leader in electric vehicle sales.

 

This scenario means Asia – and especially China, India and Japan – will need a lot more natural gas in the coming years to avoid power shortages. Policymakers are racing to find solutions, with natural-gas-fired plants being the top-of-mind alternative to provide power to households, commercial and industrial facilities.  

 

Rising LNG Imports From the U.S. 

Production of natural gas in Asia remains low, with some exceptions in India, China and Australia. But even where domestic output is rising, the expansion pales in comparison with demand, which creates an opportunity to increase imports of liquified natural gas (LNG) from the U.S. and Qatar.    

 

“While Asia consumers would prefer domestic supply over imports, as they are cheaper by 20% to 30%, rising consumption leaves plenty of room for imported LNG,” says Devin McDermott, Commodities Strategist and Head of North America Energy Research at Morgan Stanley. “A wave of investment in LNG, which can be easily transported, is unleashing this cheap energy resource and creating a new global commodity market.”

 

According to Morgan Stanley Research, Asia should absorb about 70% of global exports of LNG by 2030, with imports rising 8% annually through 2030, compared with 3% for the rest of the world. The region’s dependence on U.S. natural gas could more than double this decade and reshape supply chains for energy consumption across sectors.  

 

LNG imports could also become a key topic in tariff negotiations with the U.S. It could help lower the trade surplus with the U.S. for countries like India, Indonesia and Japan by up to 20%. 

 

Morgan Stanley Research estimates that consumption of LNG could add $60 billion in trade between the U.S. and Asian nations this decade.  

 

“Asia will be at the forefront of this new normal in gas consumption with imports from the U.S.,” McDermott says.

 

Incentive From Lower Prices  

Asian countries have improved their infrastructure for distribution of natural gas in recent years as it becomes a preferred alternative to other fossil fuels, such as coal and oil. 

 

Another incentive is price, which has fallen recently after more producing capacity has come online in different countries. This happens at a time when regulators are looking to keep power prices as affordable as possible.  

 

Asia can reduce its energy costs by $200 billion annually by 2030 by increasing the share of natural gas in its consumption mix, according to Morgan Stanley Research.

 

“With infrastructure improvements allowing more than 50% of Asia’s population to have access to gas and expanding gas import/export facilities, all the stars are aligned for Asia to catch up with the rest of the world on natural gas adoption,” McDermott says. “A wave of U.S. gas exports is set to transform Asia’s energy consumption like the shale boom did for North America last decade.”