Major energy companies are significantly increasing investments in natural gas exploration and production across Malaysia and Indonesia to meet the surging electricity demand driven by expanding populations and a rise in data centers in Southeast Asia.
At the Energy Asia conference in Kuala Lumpur, Shell announced plans to invest an additional 9 billion ringgit ($2.12 billion) in Malaysia over the next two to three years to bolster gas production. Shell CEO Wael Sawan highlighted the urgent need to replace an expected 20% drop in regional gas output by 2035, identifying liquefied natural gas (LNG) as the most practical solution due to existing infrastructure.
French energy giant TotalEnergies recently expanded its stake in Malaysian gas assets through acquisitions from state-owned Petronas, emphasizing the region’s growing energy needs as population and industrial demand increase. Italian company Eni, together with Petronas, is preparing a joint venture to further develop gas fields in both Malaysia and Indonesia, with a formal agreement anticipated by year-end.
Japanese firm Inpex has reentered the Malaysian market, focusing on offshore exploration near Sarawak and Sabah while continuing work on Indonesia’s Abadi LNG project. CEO Takayuki Ueda noted that LNG demand will rise steadily until 2040 and possibly beyond, driven by local consumption strategies amid geopolitical uncertainties.
U.S.-based ConocoPhillips also plans investments in Malaysia’s Sabah region after withdrawing from a previous project in Sarawak, signaling continued interest in Southeast Asian gas development.
Natural gas and LNG are seen as vital fuels to replace coal-fired power plants and reduce emissions, while providing stable, reliable energy for the growing network of power-intensive data centers supporting artificial intelligence and cloud services.
Petronas CEO Tengku Muhammad Taufik Tengku Aziz confirmed the company is focused on meeting the expected doubling of global data center power demand to 945 terawatt hours by 2030, aligning energy strategies accordingly.
Energy expert Daniel Yergin of S&P Global emphasized that natural gas is becoming increasingly essential, stating countries cannot meet growing electricity needs and support data center growth without expanding gas production.