How do new buyers buy LNG in Cambodia?

New buyers like Cambodia typically acquire LNG in two ways. LNG can be purchased from spot markets or through multi-year contracts, which establish volumes and pricing methods over the contract term. Each option entails various risks for energy security and cost that are critical for Cambodia.

Why is Cambodia struggling to access affordable LNG supplies?

Other countries in the region, reliant on LNG imports, have seen global market disruptions impair energy security and affordability. As a potential new market entrant with limited bargaining power, uncertain gas requirements, and a lower demand profile, Cambodia could struggle to access affordable LNG supplies.

Should Cambodia scale its LNG project aspirations?

Cambodia must scale its LNG project aspirations so that LNG-fired power does not put the government’s energy goals out of reach. Doing so would allow stakeholders to pursue LNG contracts and infrastructure plans that are best-suited to deliver Cambodia’s energy objectives.

Will LNG compete with other energy sources in Cambodia?

Even if global prices fall, LNG is highly unlikely to compete with other sources of energy in Cambodia, including solar, wind, hydropower, and coal. 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.

Does LNG importation affect electricity prices in Cambodia?

At current fuel prices, the cost of LNG-fired power generation could be more than five times that of recent solar projects in Cambodia. Case studies of other Asian markets show that LNG importation can cause electricity prices to increase while complicating power sector development.

Should Cambodia integrate a 900 MW liquefied natural gas power plant?

Cambodia's plan to integrate a 900-megawatt (MW) liquefied natural gas (LNG)-fired power plant into its electricity system is a risky proposal. Other countries in the region, reliant on LNG imports, have seen global market disruptions impair energy security and affordability.