Thailand is going on an LNG shopping spree

Thailand is going on an LNG shopping spree

Thailand is signing new contracts for LNG purchases and expanding terminals
to boost imports to replace flagging domestic production. Thailand will
boost LNG imports by more than 70% this year.

Producers of the fuel are expected to expand output by about 23 million t
this year even as spot prices for LNG in Asia have fallen more than 60% the
past three years and demand from traditional buyers in Japan and South Korea
stagnates. Thailand's PTT, which will boost imports to 5 million t this year
from 2.9 million in 2016, is also considering investing in upstream projects
as a way to maintain the country's security of supply.

Spot prices for LNG cargoes in Northeast Asia fell 5.1% this week to US$5.55
per million British thermal units. That compares with US$15.80 during the
same period three years ago.

For years, Thailand's growing economy was fuelled by rising natural gas
production from wells in the southern Gulf of Thailand. Now output from
fields like Bongkot and Erawan is dropping. Production in January was 12%
below peak output in November 2012.

To bridge the gap, PTT buys pipeline gas imports from Myanmar and in 2011
opened its first LNG import terminal near Rayong southeast of Bangkok. A
project to double its size to be able to handle 10 million tpy will be
complete before this summer. Another planned expansion will take the
capacity to 11.5 million by 2019, and PTT plans to open a second terminal
near Rayong to add another 7.5 million to import capacity by 2022.

PTT, the only company with a license to import LNG to Thailand, signed a
contract in 2012 to import 2 million tpy from Qatar. It signed three other
contracts in the past year with BP Plc, Royal Dutch Shell Plc and Petroliam
Nasional Bhd of Malaysia, adding another 3.2 million tpy of supply. PTT also
buys cargoes on the spot market and is interested in signing medium-term
deals.

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Link to Original Article:
https://www.lngindustry.com/liquid-natural-gas/24032017/thailand-is-going-on
-an-lng-shopping-spree/

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com