The U.S. and Thailand are in talks on new long-term supply of U.S.-produced liquefied natural gas, two sources said on Tuesday, negotiations that have accelerated since the U.S.-Israeli-led war on Iran led to LNG production damage in key exporter Qatar.
The talks center on a binding long-term deal between Venture Global (VG.N), and Thailand’s state-controlled energy company PTT PCL, said the sources familiar with discussions who were granted anonymity due to the sensitive nature of the discussions.
The sources did not detail the volumes or duration of any new LNG contracts being discussed, but they typically run 15 or more years.
Last October, after trade talks the administration of President Donald Trump and Thailand released a joint statement saying Thai companies would purchase about $5.4 billion a year in U.S. energy products including LNG, crude oil and ethane.
The U.S. and Israel jointly attacked Iran on February 28, which retaliated with strikes on Qatar’s LNG infrastructure in Ras Laffan that destroyed 17%, or 12.8 million metric tons per year, of the country’s LNG export capacity.
Qatar is the world’s second-largest LNG exporter after the U.S. Repairs could take between three and five years, QatarEnergy’s CEO and state minister for energy affairs has told Reuters.
A Venture Global press representative declined to comment. PTT did not immediately respond to a request for comment.
Thailand, Southeast Asia’s biggest LNG importer, has been looking to diversify its supply as it steadily displaces coal for electricity generation. In January, French utility Engie (ENGIE.PA), signed a 15-year deal to supply LNG to power plants owned by Thai company Gulf Development PCL (GULF.BK).
U.S. LNG exporter Cheniere Energy said in March that Asian customers have asked for more LNG as a result of the war. The company, the largest U.S. LNG exporter, has said it is working to speed completion of two units known as trains at its Corpus Christi, Texas plant.
PTT last year signed an agreement to procure 2 million metric tons of LNG per year from Glenfarne’s Alaska LNG project over 20 years, Glenfarne said. No final investment decisions have been made on the project, which would need an 800-mile (1,300-km) pipeline to bring gas from Alaska’s north to send it to customers in Asia.
Thailand is also seeking LNG supplies from Malaysia.
Source: Reuters