Thailand’s PTT in Talks With Qatar for LNG Deal

Reuters, July 7, 2023

Thailand's largest energy company, state-controlled PTT (PTT.BK), is in advanced talks with Qatar for a 15-year liquefied natural gas (LNG) supply deal, four trading sources told Reuters.

The oil and gas conglomerate is negotiating a supply of 1 or 2 million tonnes per annum (mtpa), according to different figures cited by the sources, in what would be the latest in a spate of deals by Asian buyers to lock in long term supplies.

A fifth industry source said that both companies are in "serious negotiations," but added that a deal isn't expected before the end of summer.

QatarEnergy and PTT did not immediately respond to a request for comment.

Qatar is the world's top LNG exporter and competition for LNG has ramped up since the beginning of the war last year in Ukraine, with Europe in particular needing vast amounts to help replace piped gas from Russia that previously made up almost 40% of the continent's imports.

Asian companies, with an appetite for long-term sales and purchase agreements, have outpaced Europe in locking in supply from Qatar's two-phase expansion plan that will raise its liquefaction capacity to 126 million metric tons a year by 2027 from 77 million.

The Gulf energy giant has been in negotiations with several other Asian buyers this year and has so far signed three LNG supply deals with Asian buyers, with more expected later this year.

PTT has been seeking spot LNG cargoes this year, traders have said, along with other companies in emerging Asian markets, after prices of the super-chilled fuel eased from last year's record highs.

PTT also signed a nine-year deal with Oman LNG at the start of the year, which will see it receive 800,000 tons of LNG per year beginning 2026.

Thailand, a net oil and gas importer, needs to increase imports of LNG to offset a steep production fall at its gas fields. So far, the country has imported around 6 million tons of LNG this year versus 8.7 million tons in 2022, according to data firm Kpler.

(Reporting by Chen Aizhu, Marwa Rashad, and Emily Chow; Additional reporting by Maha El Dahan and Chayut Setboonsarng; Editing by Mark Potter)

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