Green electricity costs have dropped by 90%—yet natural gas demand is still rising? What is natural gas’s true role?

Amid global geopolitical turbulence, energy security logic cannot be overlooked. International energy governance is shifting from idealism back toward realism—ensuring energy security is the prerequisite for energy transition. The idealized 'wind-solar-storage endgame' has been postponed, granting natural gas a longer 'strategic window.' What variables will shape natural gas’s future position? If this question defies a definitive answer, how then should we make actionable decisions? An unattainable definitive answer Natural gas faces enormous uncertainty. Its future may follow a K-shaped divergence: some demand segments are rising, while others are declining. For instance, in power systems, natural gas’s role as a peaking and flexibility provider is strengthening; in industry, its function as a high-temperature heat source remains difficult to replace; yet in transportation, its position is gradually being eroded by electricity or hydrogen. A key technological variable is whether CCUS (carbon capture, utilization, and storage) and long-duration energy storage technologies can achieve substantial cost reductions. Currently, the full-cycle cost of CCUS ranges from ¥500 to ¥650 per ton, with economies of scale yet to materialize. If CCUS technology achieves major breakthroughs, it could support natural gas’s long-term role as a 'baseload backup power source.' However, to meaningfully reinforce natural gas’s status, CCUS must undergo revolutionary advancement. Beyond cost, current CCUS projects remain heavily focused on capture and storage, while the value-adding utilization segment remains underdeveloped. The second variable is weather conditions. Natural gas’s core competitiveness as a peaking power source lies in its ability to respond to extreme multi-day windless and cloudless conditions. Should battery-based long-duration storage costs fall dramatically, the peaking value of gas-fired generation could diminish. An often-overlooked reality: during consecutive days of extreme weather, the upstream—renewable energy generation itself—is already severely curtailed; thus, what exactly would long-duration storage even store? This is the fundamental premise that long-duration storage development must confront. The third variable is the actual scale and geographic distribution of AI computing power demand. AI data centers impose exceptionally high requirements on power supply continuity and stability. This implies that, in regions densely clustered with data centers, natural gas–fired generation may retain competitive advantages for an extended period. In China, however, computing infrastructure follows an 'electricity-computing synergy' strategy—concentrated in Xinjiang, Gansu, Guizhou, and other regions rich in wind, solar, and hydropower resources—and relies primarily on the national grid rather than on-site gas-fired plants. Therefore, AI’s impact on natural gas demand cannot be generalized. Seeking fundamental solutions: finding certainty amid uncertainty Faced with these uncertainties, 'mainstay' and 'transitional' should not be viewed as binary opposites. An energy source may serve as the mainstay today, become transitional in ten years, and retreat to a standby role in twenty. Its status may also differ markedly across countries and regions: the U.S., endowed with low-cost shale gas, will likely maintain natural gas as its absolute mainstay energy source for the foreseeable future; Europe, with high carbon prices and aggressive net-zero targets, tends to regard natural gas as a 'transitional fuel.'

Chinese enterprises’ overseas combined-cycle power plant projects

16. Anwara 590 MW Combined-Cycle Power Plant Project in Bangladesh Harbin Electric International (HEI) signed an EPC contract for the Anwara 590 MW Combined-Cycle Power Plant Project with United Group of Bangladesh. The project employs Siemens H-class gas turbines arranged in a single-shaft, one-on-one configuration and is located in the Anwara area of Chittagong, Bangladesh. The owner is United Group of Bangladesh. Northeast Electric Power Design Institute of China Energy Engineering Group (CEEC) and Harbin Electric International Engineering Co., Ltd. signed a survey and design contract for the Anwara 590 MW Combined-Cycle Power Plant Project. 17. Takhtakhorosh 472 MW Gas-Fired Combined-Cycle Power Plant Project in Uzbekistan China National Machinery Industry Corporation (Sinomach) signed the Takhtakhorosh 472 MW Gas-Fired Combined-Cycle Power Plant Project. 18. Uzbekistan Photovoltaic and Combined-Cycle Power Plant Series Projects China National Machinery Engineering Corporation (CNMEG) jointly signed EPC contracts for photovoltaic and combined-cycle power plant series projects with Uzbekistan Thermal Power Generation JSC and its partner Tasyapi Group. 19. Mactan 240 MW Combined-Cycle Power Plant Project in the Philippines CNMEG signed the Mactan 240 MW Combined-Cycle Power Plant Project. Located in Mactan, Cebu, Philippines, the project plans to construct three 80 MW combined-cycle units and includes配套 construction of an LNG receiving terminal and wharf. 20. Kedah 1200 MW Gas-Fired Combined-Cycle Power Plant Water Intake Project in Malaysia China Communications Construction International (CCCC International) won the EPC contract for the water intake system of the Kedah 1200 MW Gas-Fired Combined-Cycle Power Plant. The project owner is Gunrun Power Generation Sdn. Bhd. 21. Al-Zawr Combined-Cycle Power Plant Project in Saudi Arabia Huafeng Weiye Company, a subsidiary of Shandong Electric Power Construction Corporation III (SEPCOIII), signed a new operation and maintenance (O&M) contract for the Al-Zawr Combined-Cycle Power Plant Project. With a total installed capacity of 3,041 MW, the project comprises 12 gas turbines and 5 steam turbines. Since 2013, Huafeng Weiye has participated in commissioning, trial operation, and interim O&M; since 2016, it has assumed full O&M responsibilities for all six BLOCKs and 17 generating units across the entire plant. 22. Jhang (Jhang) 1263 MW Liquefied Natural Gas (LNG) Combined-Cycle Power Plant Project in Pakistan Located in Punjab Province, Pakistan, this project was formalized through an EPC contract signed in Lahore at the PC Hotel between Vice President Fang Yanshui of China Machinery Engineering Corporation (CMEC) and Mr. Ahad Khan Chimah, CEO of Punjab Electric (Private) Limited. As the EPC contractor, CMEC is responsible for design, equipment supply, civil works, installation, training, commissioning, and warranty services. The contract value is approximately USD 520 million. The project deploys the SGT5-8000H heavy-duty gas turbine—the world’s first air-cooled H-class heavy-duty gas turbine. As CMEC’s first H-class gas turbine power plant project in Pakistan, it holds strategic significance for deepening CMEC’s presence in Pakistan’s traditional market and enhancing its performance and influence in the power engineering contracting sector—particularly in large-scale gas turbine projects.

Gas Malaysia Targets Investment Decision on Kedah LNG Terminal by Second Half of 2027

14 hours ago

Gas Malaysia plans to finalize investment for its first regasification terminal in Kedah by late 2027, targeting operations by 2030. The $735 million facility aims to boost energy security and address rising domestic gas demand.

reuters

2026-10-01

Gas Malaysia Targets Investment Decision on Kedah LNG Terminal by Second Half of 2027

Gas Malaysia Targets Investment Decision on Kedah LNG Terminal by Second Half of 2027

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