Southeast Asia's reliance on imported gas is threatening to stall its data center boom, as turmoil in the Middle East squeezes the fuel supplies underpinning the region's digital economy.

Analysts say members of the Association of Southeast Asian Nations must deepen energy cooperation, scale up renewables and expand cross-border power trade to shield their digital economies from a global liquefied natural gas crunch and geopolitical shocks.

Christina Ng, cofounder and managing director of Energy Shift Institute, an independent energy think tank, said the more ASEAN relies on imported LNG for electricity, the more external geopolitical events can ultimately affect the cost of running local industries such as data centers.

Ng questioned whether increasing LNG imports would actually improve energy security, arguing that greater dependence on the fuel could undermine it.

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Data centers require reliable power around the clock, making stable fuel supplies important to investors, she said. While long-term LNG contracts have provided some supply certainty, they cannot eliminate price volatility or geopolitical risks, she added.

ASEAN governments should be careful in pursuing digital ambitions that increase their reliance on imported fuels with volatile supplies and prices, she said.

"One lesson I took away from the recent market disruption that affected the LNG volatility is that ASEAN's energy security strategy cannot just be about 11 countries individually trying to secure more imported fuel," Ng said, referring to the bloc's member states.

The Middle East crisis should encourage ASEAN members to cooperate, harness their respective renewable energy resources and promote cross-border electricity trade, she said.

Dinita Setyawati, a senior analyst at Ember, a global energy policy think tank, said developing homegrown renewable energy and grid infrastructures will help ASEAN expand its digital economy.

While the region also produces LNG, the question is how long its gas reserves can meet growing energy demand, Setyawati said.

As data centers drive up energy demand, it is crucial for governments and other stakeholders to build an energy system that is affordable and sustainable while reducing carbon emissions, she said.

"What would change the future of ASEAN energy security is treating fossil fuels as an alternative energy supply, not as the primary baseload supply," she said.

LNG accounts for roughly 20 percent of ASEAN's energy mix, while the region's demand for fossil fuels is expected to grow as data centers drive up electricity consumption.

The International Energy Agency said ASEAN countries consume more than 10 terawatt-hours of electricity, equivalent to about 10 percent of electricity demand from data centers across the Asia-Pacific.

Declining production

ASEAN was once a net LNG exporter, with Indonesia and Malaysia among the world's top suppliers. But since 2015, LNG production in the region has declined while demand has grown by about 1 percent per year, the IEA said.

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Global research organization Zero Carbon Analytics said in its latest report that Vietnam, Thailand and the Philippines have been seeking to increase LNG imports as domestic gas supplies run low. However, it said there are growing signs of weaker LNG demand in Asia resulting from high costs and price volatility caused by the Iran conflict.

Asian governments are responding by looking to renewables as they are cheaper than LNG and can provide long-term energy security, the organization said. In recent months, several state and private companies have signed power purchase agreements to supply clean energy to data centers.

Contact the writers at prime@chinadailyapac.com