Qatar enters South East Asian LNG market

by  — 21 January 2013

Qatargas recently secured its first long-term liquefied natural gas (LNG) supply agreement with a South-East Asian nation, Thailand.

Alongside neighbour Thailand the city-state of Singapore is to become a consumer of Qatari LNG (Image Getty Images)

The deal is significant because Doha has long been targeting the heavy growth markets of Asia - with the city state of Singapore next – to offset diminishing LNG demand in the West, as the United States pushes for gas self-sufficiency via unconventional sources and European economies stagnate. 

Qatargas said in a statement that it sees Thailand “as an evolving LNG market and recognises its potential within South-East Asia to absorb significant quantities of LNG in the future”.

Under the deal, Qatargas will deliver two million tonnes per annum (MTA) of LNG for 20 years beginning in 2015 to Thai state-owned energy company PTT, the firm’s first long-term LNG supply contract. Qatargas CEO Khalid bin Khalifa Al Thani said the deal was “a momentous occasion”, because it was Qatargas’ first in the region. He added he was “very happy that discussions with PTT regarding a long-term agreement have come to fruition”. 

Qatargas gained the advantage over rival suppliers through the delivery of commissioning cargoes prior to signing the deal. Those cargoes allowed the Thai firm to ensure the smooth running of its new import facility.  “In our initial preparation for LNG imports, Qatargas supported us,” PTT CEO and president Pailin Chuchottaworn said. He added that, in particular, Qatar’s LNG delivery had proved helpful in 2011 when one of the Thai company’s transmission pipelines faced problems. 

This indicates that the South-East Asian market could open up even further for Qatargas in 2013 because, just a fortnight before the Thailand agreement was signed, Qatargas inked a deal to supply a commissioning cargo to a Singapore terminal – the first ever to enter the city-state – mirroring the approach that the company took in its dealings with PTT.

The Singapore-bound cargo, to be delivered in early 2013, will be used to commission Singapore LNG Corporation’s first importation terminal. Al Thani confirmed the deal would help Qatargas build relationships with new customers. 

LNG exports are the cornerstone of Qatar’s domestic economy and are essential to the government’s spending plans. According to Qatar National Bank (QNB) Group, in 2011, Qatar exported 47 percent of its LNG to the Asia Pacific region, while 42 percent went to Europe. A number of potential long-term supply agreements are currently under discussion with India, Pakistan and Turkey, according to QNB.

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