Amid efforts to avoid heavy tariffs, many Asian countries are pursuing large LNG deals with the U.S. — but will it pay off in the long run?
Asian nations have proposed increasing their purchases of U.S. liquefied natural gas (LNG) during negotiations with the Trump administration, aiming to reduce trade deficit tensions and dodge new tariffs.
Analysts warn this strategy may threaten these countries’ long-term environmental goals and energy security.
Securing more U.S. LNG has risen to the top of concessions offered by Asian nations in talks with Washington over President Trump’s sweeping tariffs on foreign goods.
U.S. efforts to expand LNG exports to Asia predate Trump’s presidency, but his aggressive push for trade deals has accelerated the process.
Japan Is Buying Gas It Doesn’t Need
Vietnam’s prime minister has emphasized the need to boost imports of the super-cooled fuel and, in May, the government signed a deal with an American firm to establish a gas import hub.
Japan’s largest power provider, JERA, also signed new 20-year contracts in June to import up to 5.5 million tonnes of U.S. gas annually, beginning around 2030.
Trump discussed cooperation on a $44 billion Alaska LNG project with South Korea, prompting a delegation’s visit to the site in June.
This initiative aims to transport gas from Alaska’s North Slope to a liquefaction plant in Nikiski, bypassing the Panama Canal and targeting exports to Asia.
Thailand, the Philippines & India on Board
Thailand has offered to sign a long-term deal for U.S. fuel and expressed interest in the Alaska project’s proposed 1,300 km pipeline.
The Philippines is also considering importing gas from Alaska, while India is mulling removal of import duties on U.S. energy to reduce its trade surplus with the U.S.
“Trump has put enormous pressure on Asian trading partners to buy more U.S. LNG,” said Tim Daiss of APAC Energy Consultancy. He noted that Japan, despite already having ample LNG reserves, agreed to increase purchases.
He added: “This is not good for Southeast Asia’s sustainability goals.”
Renewables in the Shadow of LNG
Experts argue that long-term LNG contracts could slow Asia’s shift to renewables. Locking in LNG may tether countries to aging infrastructure even as the world moves rapidly toward cheaper and faster clean energy sources like solar and wind.
Indra Overland, Head of Energy Research at the Norwegian Institute of International Affairs, says:
“Building pipelines, terminals, and even household gas stoves creates costly systems hard to replace, making the transition to renewables more difficult.”
He also pointed out that fossil fuel companies wield significant influence on policy, often biasing decisions in favor of their business models.
Environmental & Economic Drawbacks
Although LNG burns cleaner than coal, it remains a fossil fuel that emits greenhouse gases and contributes to climate change.
Many LNG contracts include “take-or-pay” clauses requiring governments to pay even if the gas isn’t used. Christopher Doleman of the Institute for Energy Economics and Financial Analysis warns that if renewables grow quickly and demand for LNG drops, countries may still pay for unused gas.
Pakistan illustrates this risk: soaring LNG prices drove up electricity costs, prompting consumers to install rooftop solar panels. Now, with falling demand and rising gas supply, Pakistan is postponing LNG shipments and seeking to resell surplus gas.
Barriers to U.S. LNG Imports
Analysts argue that while Asian countries express willingness to import more U.S. LNG, the quantities needed to significantly impact the U.S. trade deficit are unrealistic.
South Korea would have to import 121 million tonnes annually—50% more than the total U.S. LNG exports last year and three times Korea’s current intake, says Doleman.
Vietnam, with a trade surplus twice that of South Korea’s, would need 181 million tonnes each year—over twice the U.S.’s entire LNG export volume last year.
Economic & Structural Challenges
The Alaska LNG project is widely considered uneconomical. In Asia, both coal and renewable energy remain so cheap that U.S. gas would need to be less than half its current price to compete.
Tariffs on Chinese steel raise the cost of building pipelines and LNG terminals, and lengthy delays in turbine manufacturing mean new gas power plants may not become operational until around 2032.
Meanwhile, a global LNG surplus is likely to drive prices down, making long-term contracts at current high rates harder to justify.
Energy Security at Risk
Committing to long-term U.S. LNG deals could undermine regional energy security amid geopolitical and market fluctuations.
Overland stresses: “The U.S. is not a consistently predictable partner. Relying on its energy carries major risk.”
Dario Kenner of Zero Carbon Analytics adds:
“LNG only supports energy security when it’s both available and affordable—crucial factors often overlooked.”
He cites recent supply disruptions via the Strait of Hormuz and LNG redirection to Europe during Russia’s invasion of Ukraine as examples—showing how global events can disrupt supply and pricing in Asia.
Looking Ahead: Renewables to the Rescue
Asian nations can enhance energy security and reduce emissions by investing in renewables. Kenner notes that only about 1% of Southeast Asia’s solar and wind potential is currently tapped.
“There are real alternatives to meet growing electricity demand. More LNG isn’t the only answer.”
