Investing.com -- If Russian gas were to flow into Europe again, Asia stands to gain, as per analysts at Morgan Stanley (NYSE: MS ).

The return of Russian pipeline gas or Arctic LNG to the European market would ease global competition for liquefied natural gas , leading to lower LNG prices.

This shift could bring economic benefits to key Asian economies such as Japan, China, and India, while also influencing energy policies and industrial competitiveness in the region.

With Asia accounting for two-thirds of global LNG demand and nearly 80% of its projected growth through 2030, any reduction in LNG prices could have widespread implications.

Morgan Stanley projects that Asian LNG prices will decline steadily, reaching an estimated $9.5-$10 per million British thermal units (mmbtu) by 2026—roughly 30% lower than spot prices.

A more well-supplied LNG market would lower the cost of energy, benefiting industries that rely heavily on natural gas and helping countries accelerate their transition toward cleaner energy sources.

India, China, and Japan stand out as the primary beneficiaries of this development. For India and Southeast Asia, cheaper gas could solidify natural gas as a key transition fuel for electricity generation.

The debate over whether the region would bypass gas in favor of renewables may be settled in favor of a gas-supported transition.

Morgan Stanley estimates that natural gas penetration in India, the Philippines, and Vietnam could increase by 50% over the next five years, reducing reliance on more expensive or polluting fuels such as coal.

Japan, which has long-term LNG contracts tied to oil prices, would benefit from lower spot prices, potentially improving the margins of its gas utilities and power producers.

For Asian energy companies, this shift could create opportunities. Gas pipeline operators such as GAIL in India, Osaka Gas in Japan, and PetroChina could see upside as cheaper gas drives higher demand and better margins.

Similarly, city gas players like ENN Energy and Mahanagar Gas stand to gain from the affordability of LNG, which could expand household and industrial consumption.

Meanwhile, power utilities and hybrid energy producers, including Sembcorp, Tohoku Electric, and Tenaga Nasional, could benefit from lower input costs, improving profitability and supporting the integration of renewable energy sources.

Beyond immediate economic gains, lower LNG prices could also affect Asia’s broader energy landscape. Reduced costs may encourage further investments in LNG infrastructure, storage, and distribution networks. Additionally, industries such as petrochemicals and fertilizers, which rely on natural gas as a feedstock, could become more competitive internationally.

This could have ripple effects on manufacturing and exports, particularly for countries looking to establish themselves as global energy hubs.

While the potential return of Russian gas to Europe could contribute to a surplus in global LNG supply, Morgan Stanley analysts caution that any reintroduction is expected to be gradual.

Even if political developments allow for renewed Russian exports, the impact is likely to be limited in the near term, with substantial volumes not expected until 2026 or later.

Additionally, geopolitical uncertainties, regulatory barriers, and European energy policy shifts could influence the extent to which Russian gas re-enters the market.