UK-based BP is to supply Thailand's state-owned PTT with approximately 1 million mt of LNG per year over 20 years starting in 2017, the portfolio seller said in a statement Friday.
This is PTT's second long-term LNG contract as it aims to meet growing downstream consumption and decreasing pipeline supply from neighboring Myanmar.
Natural gas accounts for almost 70% of Thailand's power generation, and about a quarter of that is imported via pipeline from Myanmar. But that supply has been declining as Myanmar diverts volumes to its growing domestic market.
BP will deliver the LNG from its global portfolio, including the Freeport LNG Project in the US where it has a liquefaction tolling agreement for more than 4.4 million mt/year. The project is due to startup in 2018.
BP is also involved in LNG projects in Australia, the UAE, Indonesia, Egypt, Trinidad and Angola.
"Thailand has become a significant LNG market and this agreement with PTT further demonstrates our LNG supply capability in the region," said Paul Reed, chief executive of BP Integrated Supply and Trading.
PTT currently receives LNG from Qatargas' export facility in Ras Laffan through a long-term agreement signed in December 2012 for the supply of 2 million mt/year of LNG for 20 years, that started in January 2015.
PTT also won approval from Thailand's National Energy Policy Committee in August 2015 for the purchase of 1 million mt/year of LNG from Shell Eastern Trading over 15-20 years, but the contract is yet to be signed.
Thailand's spot LNG imports have also increased, according to Platts LNG tender data, especially during the peak summer demand season.
To accommodate growing LNG imports, PTT is in the process of doubling the capacity of its 5 million mt/year terminal at Map Ta Phut in Rayong. The project is due to be operational in 2017.
The company is also planning to invest Baht 1 billion ($27.9 million) to raise the capacity of the LNG import terminal at Map Ta Phut by another 1.5 million mt/year by 2019, a company spokesman said earlier this year
The country's Committee on Energy Policy Administration has already approved the expansion, which is pending approval from the National Energy Policy Committee.
A second onshore terminal is waiting for governmental approval. It is expected to have a capacity of 5 million-7.5 million mt/year and will be built in either in Rayong or other areas.
PTT is also considering setting up a floating storage and regasification unit in Myanmar and a third LNG onshore Terminal.
Source: PlattsPrevious Next