IEEFA – Cambodia at a Crossroads: An Economic Assessment of LNG-to-Power Plans, Nov 2024

The Institute for Energy Economics and Financial Analysis (IEEFA) has released a report titled "Cambodia at a Crossroads: An Economic Assessment of LNG-to-Power Plans," evaluating Cambodia's potential transition to liquefied natural gas (LNG) for power generation. The report highlights that while LNG could diversify Cambodia's energy mix, it may also increase the nation's fuel import bill and potentially hinder government efforts to reduce electricity tariffs. Global LNG prices have been highly volatile in recent years, disproportionately impacting emerging Asian economies. The study emphasizes that high dependence on LNG could jeopardize national energy security rather than improve it, as LNG has proven unreliable for many emerging Asian nations, which often struggle to purchase the fuel when global prices spike. Even if global prices fall, LNG is highly unlikely to compete with other sources of energy in Cambodia, including solar, wind, hydropower, and coal. The report suggests that Cambodia is especially likely to pay above-market rates for its LNG supplies as a potential new market entrant with limited bargaining power, uncertain LNG requirements, and lower demand.