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Energy Majors Boost Gas Investments in Southeast Asia to Power Growing AI Data Centers

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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.

Trump to Join AI and Energy Summit in Pittsburgh with Tech and Energy Leaders

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U.S. President Donald Trump will attend an artificial intelligence and energy summit in Pittsburgh, Pennsylvania, on July 15, according to an announcement from the office of Pennsylvania U.S. Senator Dave McCormick. The inaugural Pennsylvania Energy and Innovation Summit will take place at Carnegie Mellon University.

The event is expected to gather top executives from both the tech and energy industries. Axios reported that the guest list includes high-profile tech leaders such as OpenAI CEO Sam Altman, Meta Platforms CEO Mark Zuckerberg, Microsoft CEO Satya Nadella, and Alphabet CEO Sundar Pichai. Leading figures from the energy sector such as Exxon Mobil CEO Darren Woods, Shell CEO Wael Sawan, and Chevron CEO Mike Wirth are also expected to attend.

White House AI czar David Sacks is scheduled to participate as well. Earlier this week, Sacks voiced concerns that excessive regulation of artificial intelligence in the U.S. could hinder industry growth and give China a competitive advantage in the global AI market. His comments suggest that the Trump administration may adopt a more expansionist policy for U.S. AI companies, focusing on boosting international markets for American AI chips and models.

This approach contrasts with that of Democratic former President Joe Biden, who emphasized strict controls to prevent U.S. AI chips from being used to strengthen China’s military capabilities.

Meanwhile, a bipartisan group of 40 state attorneys general, including Republicans from Ohio, Tennessee, Arkansas, Utah, and Virginia, have pushed back against federal efforts to limit state-level AI regulations. They argue that states should retain the authority to develop and enforce consumer protection rules for AI technologies.

The Pittsburgh summit signals the increasing intersection of AI policy, energy strategy, and international trade considerations in U.S. political and economic debates as AI continues to reshape multiple sectors.

Shell and Equinor to Create Britain’s Largest Independent Oil and Gas Company in Joint Venture

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Oil giants Shell and Equinor have unveiled plans to merge their U.K. offshore oil and gas operations into a new joint venture, marking the creation of the largest independent oil and gas company in the U.K.

Details of the Joint Venture

The companies aim to establish the venture in Aberdeen, Scotland, by the end of 2025, pending regulatory approvals. This move is designed to maintain fossil fuel production and ensure the stability of the U.K.’s energy supply. Once completed, the venture will become the largest independent producer in the U.K. North Sea, according to Shell.

The combined entity is expected to produce over 140,000 barrels of oil equivalent per day by 2025. While Shell’s stock saw a slight dip of 0.8%, Equinor’s share price rose by 0.3% following the announcement.

Strategic Rationale

Shell’s Zoë Yujnovich emphasized that domestically produced oil and gas will continue to play a vital role in the U.K.’s energy future. She added that the joint venture will contribute significantly to the country’s energy transition, supplying heat for homes, power for industries, and fuels for everyday use.

The new venture will bring together Equinor’s assets in Mariner, Rosebank, and Buzzard, alongside Shell’s holdings in Shearwater, Penguins, Gannet, Nelson, Pierce, Jackdaw, Victory, Clair, and Schiehallion. Equinor currently employs 300 staff in the U.K., while Shell has around 1,000 employees across its oil and gas operations in the country.

Philippe Mathieu, Equinor’s executive vice president for exploration and production, stated that the deal strengthens the company’s cash flow and enhances both companies’ abilities to secure the U.K.’s energy supply.

Economic and Strategic Considerations

Analysts, including Biraj Borkhataria of RBC Capital Markets, highlighted the potential for significant “tax synergies” between the two companies, especially in light of recent changes to the U.K. government’s fiscal policy on oil and gas.

In the context of higher windfall taxes, which could curtail investment in North Sea development, combining resources makes strategic sense, allowing Shell and Equinor to pool their expertise and assets while reducing their capital focus in the region. This mirrors moves by other companies like Eni, which have adjusted their strategies in response to the challenging U.K. market.