Morgan Stanley Analysts Highlight Coal as Key LNG Alternative for Asia

Morgan Stanley analysts have indicated that coal could serve as a significant alternative to liquefied natural gas (LNG) for Asian economies, provided that electricity supply remains uninterrupted. According to Jin10, South Asia still possesses flexible coal power capacity, with recent additions of coal-fired power plants in the region. Analysts estimate that approximately 20% of Asia's electricity supply relies on LNG from the Middle East. The ongoing conflict in Iran poses a critical risk to LNG supply, impacting data centers and power grids in the region. India and Thailand are noted for their high dependency on spot LNG, while utility companies in Malaysia and Indonesia may experience relatively limited effects from fuel supply disruptions. Rising LNG prices could potentially widen the power price spread for efficient operators, particularly in wholesale electricity markets like those in the Philippines and Singapore.