Authors: Sri Konsep Harum Wicaksono, Diah Retno Yuniarni
Despite Southeast Asia’s significant role as a major natural gas producer and leading global exporter, the region is projected to become a net importer of LNG by 2025 due to regional supply-demand imbalances. Countries such as Indonesia, Thailand, Malaysia, Singapore, and the Philippines must address this challenge by prioritizing energy security and resilience. This shift, driven by domestic demand outstripping supply, underscores the urgent need to enhance strategic planning across the region.
ASEAN member states (AMS) continue to rely heavily on fossil fuels, driven by abundant natural gas resources and established infrastructure, including pipelines and LNG facilities. Natural gas, recognized as a low-emission energy source, remains crucial for regional energy security. However, as the energy transition progresses, a renewed commitment from all member countries is essential.
With COP 29 in Azerbaijan approaching in November 2024, ASEAN nations must seize this opportunity to develop a strategic energy roadmap that enhances resilience and accelerates the energy transition. The previous Memorandum of Understanding (MoU) for the Trans-ASEAN Gas Pipeline (TAGP) has proven insufficient in addressing the evolving energy landscape. Revamping the MoU is vital to ensure the TAGP remains relevant not only today but also in the coming decade.
The TAGP was initially designed to bolster Southeast Asia’s energy security and promote economic integration. Although global focus is shifting towards renewable energy, natural gas remains a key component of ASEAN’s energy mix. In 2020, natural gas constituted 21% of the region’s Total Primary Energy Supply (TPES), with projections indicating an increase to 48% by 2050. This highlights the continued importance of natural gas, even as the world moves towards cleaner energy solutions.
Since its initiation in 2002, the TAGP project has involved all 10 ASEAN member states. Yet, two decades later, progress has been slower than anticipated, with persistent challenges. The extension of the TAGP MoU in 2024 for another 10 years raises critical questions: Will this extension address the forthcoming challenges effectively? And does the TAGP still align with the region’s evolving energy goals?
Achieving ASEAN Interconnection Through Gas Pipelines
The TAGP was initially introduced in the late 1990s as part of the broader ASEAN Plan of Action for Energy Cooperation (APAEC). The vision was to create a transnational pipeline network that would link the gas-rich nations of Indonesia, Malaysia, and Brunei with other ASEAN countries with growing energy demands, such as Thailand, Singapore, and the Philippines. This ambitious plan aimed to enhance regional energy security by ensuring a reliable and steady supply of natural gas across the region.
To date, 13 cross-border pipelines, spanning a total length of 3,631 km, have been established, connecting six countries. However, the effectiveness of these pipelines in enhancing energy security has been limited by their reliance on bilateral cooperation, which restricts their scope and makes them vulnerable to shifting political dynamics. The lack of multilateral cooperation has hindered the full realization of the TAGP’s potential, underscoring the need for a more collaborative approach. Given this context, complex infrastructure projects like the TAGP in a diverse region require the establishment of common frameworks. Achieving this necessitates a certain level of cross-border collaboration and cooperation before embarking on any significant gas infrastructure development.
The Relevance of TAGP Amid the Region’s LNG Growth
In recent years, ASEAN has become a significant player in the global Liquefied Natural Gas (LNG) market, driven by rapid economic growth and increasing energy demands. Countries like Indonesia, Malaysia, and Brunei have long been key LNG exporters, while nations such as Vietnam, the Philippines, and Thailand are expanding their import capacities, reflecting a broader regional shift towards greater LNG consumption. This growing demand is fueled by urbanization, industrialization, and government policies aimed at reducing carbon emissions, positioning ASEAN as a crucial hub in global LNG trade.
In response to these developments, a strategic reassessment in 2012 expanded the Trans-ASEAN Gas Pipeline (TAGP) to include LNG as a core component of the region’s gas supply strategy. This shift was particularly important for countries where physical pipelines are not economically viable, with LNG supplied to regional regasification terminals (RGTs) that act as virtual pipelines. Today, 14 RGTs across seven countries, with a combined capacity of 57.76 million tonnes per annum (MTPA).
ASEAN’s accelerated growth in the LNG sector not only addresses its expanding energy needs but also enhances its role in the global energy market. As ASEAN continues to invest in LNG infrastructure and bolster regional cooperation, it is poised to play a pivotal role in shaping the future of the global LNG landscape.
Revisiting TAGP MoU Extension: Strengthening Commitment to Collaboration
The extension of the MoU to 2034 renews hope for advancing ASEAN’s goals of a fully interconnected region and ensuring energy security. Despite the region’s expected shift to becoming a net importer of gas by 2025 (7th ASEAN Energy Outlook, 2022), the continued commitment to the TAGP project provides a strong foundation to address these challenges and achieve its ambitious objectives. Revisiting the TAGP master plan is essential to determine if the amendments are sufficient to address key issues such as natural gas pricing, legal frameworks, and the responsibilities for operating, securing, and maintaining the network.
As the energy landscape evolves and new technologies emerge, the concept of a “virtual pipeline” has gained prominence, offering a flexible and innovative approach to natural gas distribution. Integrating virtual pipelines into the TAGP project marks a significant advancement in regional energy connectivity. These virtual pipelines provide a cost-effective, rapid solution that can keep pace with ASEAN’s economic growth and development, complementing traditional pipelines in achieving the region’s energy security, sustainability, and resilience goals.
Navigating these complexities, the TAGP, supported by its LNG infrastructure and potential cross-border gas market, reflects ASEAN’s commitment to securing its energy future. For TAGP to remain relevant, stakeholders must collectively consider the impact of reduced supply on demand, with the ASEAN Council of Petroleum (ASCOPE) playing a crucial role in collaboration with AMS, government, and multilateral institutions to review the TAGP master plan and ensure continued multilateral cooperation.