PTT, Centrica Ink LNG Deal
National oil and gas conglomerate PTT Plc is strengthening its position as a liquefied natural gas (LNG) trader in Southeast Asia, with its latest move paving the way to sell LNG to a British multinational energy firm.
PTT not only buys LNG under long-term purchase contracts to ensure Thailand has sufficient fuel for power generation, but it also sells the gas overseas to rack up revenue.
The company recently signed a heads of agreement for long-term LNG sales to Centrica LNG Co, scheduled for delivery in 2028, said Jaturong Worawitsurawatthana, senior executive vice-president overseeing international trading at PTT.
Known as HoA, heads of agreement serves as a roadmap for negotiations and helps parties ensure they are on the same page regarding key aspects of a deal.
Under the HoA, subsidiary PTT International Trading Pte will supply LNG to Centrica for a 10-year period across a range of destinations in Asia, based on a delivered ex-ship (DES) basis.
DES is used for pricing and delivery management, where a seller is responsible for LNG until it has been made available to a buyer on board the ship at a destination.
“With this agreement, PTT is moving to become a major LNG trader in Southeast Asia,” said Mr Jaturong.
The collaboration secures PTT International Trading’s first long-term LNG sales contract outside Thailand, aligning with the company’s international growth ambitions.
PTT previously announced it signed a long-term purchase contract to buy 2 million tonnes of LNG from Alaska to avoid LNG price fluctuations in the spot market and address the trade imbalance with the US.
Thailand needs LNG to fuel its power generation as the domestic gas supply is on the decline.