Thailand's PTT In Advanced Talks With Qatar For A 15-Year LNG Supply Deal

Thailand’s PTT in advanced talks with Qatar for a 15-Year LNG supply deal

Thailand’s largest energy corporation, state-owned PTT (PTT.BK), is engaged in advanced discussions with Qatar for a 15-year liquefied natural gas (LNG) supply contract, according to reports from four trading insiders cited by Reuters. The deal is part of an ongoing trend where Asian buyers are securing long-term LNG supplies.

The two parties are debating an annual supply of either one or two million tonnes, depending on the sources who reported varying figures. The completion of the deal is unlikely before the end of summer, a fifth industry insider added.

PTT, alongside other firms in emerging Asian markets, has been actively seeking spot LNG cargoes this year, as the cost of this supercooled fuel has receded from last year’s peak. At the beginning of the year, PTT also entered a nine-year contract with Oman LNG, which will provide 800,000 tonnes of LNG per year starting from 2026.

Qatar, a powerhouse in global LNG exports, has witnessed increasing competition for its LNG since the onset of the Ukraine conflict last year. This has notably affected Europe, which has needed to replace almost 40% of its gas imports previously piped from Russia with vast amounts of LNG.

Asian corporations, driven by the desire for long-term sales and purchase agreements, have eclipsed Europe in securing supplies from Qatar’s two-phase expansion project. This endeavour aims to increase Qatar’s liquefaction capacity to a staggering 126 million metric tonnes a year by 2027, a considerable jump from its current 77 million.

This Gulf energy titan has held negotiations with several Asian buyers this year and has already ratified three LNG supply agreements with Asian entities. More such deals are anticipated later in the year.

Thailand, a country reliant on oil and gas imports, needs to ramp up LNG imports to compensate for a sharp decline in its domestic gas field production. As per the data provided by firm Kpler, the country has imported approximately six million tonnes of LNG this year in comparison to 8.7 million tonnes in 2022.