The world’s predicament of tight liquefied natural gas (LNG)) supply is anticipated to persist until year 2025, entailing that import dependent countries of this commodity will have to continuously put up with surging costs in their electric bills.

An outlook issued by the Institute for Energy Economics and Financial Analysis (IEEFA) indicated that with strained LNG supply, demand growth in key Asian import markets will have to be curbed.

The assessment of the IEEFA primarily conveyed that “Southeast Asian buyers face challenges from high prices and infrastructure constraints.”

Additionally, it noted that long-term LNG contracts with deliveries starting before 2026 are reportedly sold out globally, forcing Southeast Asian countries into expensive spot markets.”

In the Philippine energy market, this is the initial year that the market will be having its debut on LNG importation with the scheduled commercial commissioning and operation of at least two floating storage and regasification units (FSRUs) between first and second half of this year.

This early, the Department of Energy (DOE) already raised alarm that the LNG to be procured by the FSRU-owner firms will likely be expensive compared to the current supply of gas being drawn from the Malampaya field.

With higher-priced LNG that will be sourced for the domestic gas plants, it is also highly expected that this will result in the uptrend of costs to be shouldered by ratepayers.

The IEEFA chiefly highlighted that “the Russia-Ukraine crisis has exposed long-term financial risks throughout the LNG value chain.”

The organization expounded that “high spot prices and supply disruptions earned LNG a reputation as an expensive and unreliable fuel source, undermining the prospects for demand growth in key markets.”

Nevertheless, there is silver lining seen to the LNG supply conundrum, with the IEEFA emphasizing that “when large volumes of new supply enter the market starting in mid-2025, it could trigger a supply glut,” hence, changing the risk profile on how LNG exporters and traders will eventually be pricing the fuel.