How do new buyers buy LNG in Cambodia?

New buyers like Cambodia typically acquire LNG in two ways. LNG can be purchased from spot markets or through multi-year contracts, which establish volumes and pricing methods over the contract term. Each option entails various risks for energy security and cost that are critical for Cambodia.

Why is Cambodia struggling to access affordable LNG supplies?

Other countries in the region, reliant on LNG imports, have seen global market disruptions impair energy security and affordability. As a potential new market entrant with limited bargaining power, uncertain gas requirements, and a lower demand profile, Cambodia could struggle to access affordable LNG supplies.

Should Cambodia integrate a 900 MW liquefied natural gas power plant?

Cambodia's plan to integrate a 900-megawatt (MW) liquefied natural gas (LNG)-fired power plant into its electricity system is a risky proposal. Other countries in the region, reliant on LNG imports, have seen global market disruptions impair energy security and affordability.

Should Cambodia scale its LNG project aspirations?

Cambodia must scale its LNG project aspirations so that LNG-fired power does not put the government’s energy goals out of reach. Doing so would allow stakeholders to pursue LNG contracts and infrastructure plans that are best-suited to deliver Cambodia’s energy objectives.

Will Cambodia pay a penalty for using LNG?

Since LNG’s role in the Cambodian energy system is still uncertain, the country could find itself paying significant penalties. Importantly, LNG is likely to be expensive under both approaches. Prices under both spot and contract arrangements are currently two to three times as high as coal.

Does Cambodia need liquefied natural gas?

Cambodia does not produce its own gas, so the project requires the infrastructure to import the fuel in its cold, liquid form, then reheat it for combustion in the plant. A 2023 report by the Economic Research Institute for ASEAN and East Asia (ERIA) advocates for liquefied natural gas (LNG) to play a major role in Cambodia’s energy future.