KARACHI/SINGAPORE:

Asian utilities are boosting coal-fired power generation to cut costs and safeguard energy supply, industry officials say, as the US-Israeli war on Iran chokes liquefied natural gas (LNG) shipments and soaring prices threaten to suppress LNG demand.

Asia spot LNG prices have doubled to three-year highs in the second major supply shock in four years, as shipping through the Strait of Hormuz has all but stopped and No2 global exporter Qatar has halted shipments.

In South Asia, Bangladesh is increasing coal power generation and coal-fired power imports in March, daily government data shows.

Pakistan, meanwhile, aims to further boost power generated from domestic sources after solar additions helped it avoid a repeat of the LNG supply volatility behind widespread outages following Russia’s 2022 Ukraine invasion, Power Minister Awais Leghari said. “With reduction in LNG generation, plants running on locally mined coal will be able to produce more during off-peak hours,” Leghari told Reuters.

Natural gas has accounted for a declining share of Asia’s power generation for nearly a decade due to surging renewables usage, Ember data shows, despite global energy majors betting billions of dollars on regional LNG demand growth.