With this deal, PTT follows other emerging Asian markets in seeking LNG supplies as prices of the super-cooled fuel have cooled from last year’s record highs.
Thailand’s principal energy firm PTT Public Company Limited is reportedly in the final stages of securing a 15-year liquefied natural gas (LNG) agreement with Qatar, reported Reuters.
The deal would signal a significant shift in Thailand’s energy procurement strategies amid a spate of long-term LNG deals by Asian purchasers.
While the exact supply quantities are still under discussion, it is understood that PTT is negotiating a yearly supply of between 1 to 2 million metric tonnes.
The long-term agreement is consistent with the growing trend among Asian companies to secure reliable LNG sources, outpacing their European counterparts in terms of supply deals from Qatar’s ambitious two-phase expansion plan.
The Thai state-controlled oil and gas conglomerate also entered into a nine-year agreement with Oman LNG earlier this year to receive 800,000 tonnes of LNG annually, starting in 2026.
According to an additional industry source, both companies are engaged in “serious negotiations,” but a finalised deal is not anticipated until after the summer season, reported Reuters.
As the primary oil and gas importer, Thailand is confronted with the need to augment its LNG imports to compensate for a severe drop in domestic gas field production.
Data analytics firm Kpler indicates that so far this year, Thailand’s LNG imports are at approximately 6 million tonnes, in contrast to 8.7 million tonnes imported during 2022, according to Reuters.
The PTT-Qatar deal adds to the several negotiations the Gulf energy giant has been undertaking with various Asian buyers this year. Qatar has already concluded three LNG supply agreements with Asian buyers, with more expected later in 2023.
Qatar and Thailand have maintained robust diplomatic ties since their formal establishment in 1980. Energy sector collaborations have consistently underpinned these bilateral relations, given Qatar’s significant fossil fuel reserves and Thailand’s increasing energy demands.
Qatar’s position as the world’s top LNG exporter has gained more significance since the outbreak of the war in Ukraine last year. Europe, which traditionally sourced nearly 40% of its gas imports via pipelines from Russia, now requires extensive LNG supplies to replace the disrupted supply.
Qatar’s plan to expand its liquefaction capacity to 126 million metric tonnes per year by 2027, up from the current 77 million, places it in a unique position to fulfil this surge in demand.