November 10, 2022

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Thai Joint Venture Awards Feed Contract for Third Regasification Terminal

A Thai joint venture has awarded a contract for Thailand's third regasification terminal, an almost 11 million ton capacity project to be located near existing terminals.

Thailand, which has operational LNG import capacity of about 19 million tons, has been the largest LNG importer in the rapidly growing Southeast Asian market for the last three years.

Updating the Feed

Gulf MTP LNG Terminal (GMTP) has awarded a contract to Tokyo Gas Engineering Solutions which would update front-end engineering design (Feed) work and conduct tender management services for its planned regasification terminal in Map Ta Phut in Thailand.

GMTP, a joint venture owned 70% by local power producer Gulf Energy Development and 30% by state PTT subsidiary PTT Tank, is a public-private partnership aimed at establishing an LNG value chain.

Set up in 2019, GMTP is planning to reclaim land at Map Ta Phut Industrial Port Development phase 3 and build an LNG terminal with a capacity of up to 10.8 million tons/yr.

Tokyo Gas Engineering Solutions, which conducted the original Feed work in 2020, said it would update the Feed and provide services for an upcoming tender to pick an engineering, procurement, construction and commissioning contractor by mid-2023.

Gulf Energy is an emerging buyer which wants to import the superchilled fuel directly to feed its gas-fired power plants. The firm said earlier that construction of the LNG terminal would take place in 2023-2027, subject to LNG demand.

PTT is already the operator of Thailand’s existing two import terminals at Map Ta Phut and Nong Fab.

Rising Imports

Gulf Energy and its subsidiary Hin Kong are among several firms which have secured LNG import licenses from the domestic regulator, Energy Regulatory Commission. Gulf Energy would be able to import 300,000 tons/yr of LNG, while Hin Kong is allowed to import 1.4 million tons/yr of LNG.

Thailand has continued to increase its LNG intake this year — despite high prices — due to declines in domestic gas production. The county’s LNG imports reached 6.6 million tons in the first nine months of this year, up 40% from the same period last year, according to Thai government data.

Thailand has represented just over 50% of the growing Southeast Asian LNG import market for the last two years, according to Kpler.

Created with Highcharts 9.0.0(million tons)SOUTHEAST ASIAN LNG IMPORTSThailandSingapore RepublicMalaysiaIndonesiaMyanmar2018201920202021202202468101214Source: Kpler

Clara Tan, Singapore

Petronet LNG’s Terminal Use Dips as Spot Volumes Wither

Petronet LNG, India’s largest LNG importer, is seeing a sharp dip in capacity use at its terminal as spot prices remain unaffordable for price-sensitive Indian buyers. However, recently cooling prices have ignited hopes capacity use may improve going ahead.

The New Delhi based company’s flagship 17.5 million ton per year capacity Dahej terminal, on India's west coast, operated at 80% capacity in the July-September quarter, compared with 87% in April-June and 99% in the July-September quarter last year, Managing Director Akshay Kumar Singh told reporters Thursday. It is now operating at 70%-75%, Singh added.

“The main reason is (fall in) service cargoes as spot LNG prices are on [the] higher side,” Singh said.

In India, LNG competes with cheaper liquid fuels and coal, which had led consumers to shift to such alternatives as spot LNG prices have skyrocketed amid Europe's competition with Asia for the super-cooled fuel.

India was the world's fourth-largest LNG importer in 2021, but has slid to seventh place in 2022, according to Kpler.

Created with Highcharts 9.0.0(million tons)DAHEJ LNG IMPORTS2015201620172018201920202021202205101520Source: Kpler

Priced Out

About 27,000 MW of India's gas-fired power plants are idling as it can afford LNG only at around $7-$8/MMBtu, Singh said. He added that though LNG prices have softened to around $21-$22/MMBtu, India’s demand will increase only if the rates are in-line with the term LNG price of around $13/MMBtu.

As a result, four out of the operational six LNG terminals in India, which have a combined capacity of 42.7 million tons per year, operated below 20% capacity during the April-August period of the current financial year that began Apr. 1, according to the federal oil ministry’s latest data.

However, Singh said that there was no tank top situation as the volumes that are coming are mostly term imports which are finding buyers.

Long-Term Solution

“Everybody is now realizing long-term would be the solution,” Singh said. He added that Petronet is contemplating how much of the total LNG should be secured via term and spot to make the best fit for India.

However, Petronet and other Indian buyers have been struggling to forge new term deals.

Petronet’s key 7.5 million ton/yr contract with Qatar will expire in 2028, but it has to close a deal by December 2023 to renew it. Singh said that a task force is working to finalize the extension.

Petronet is also adding 9 million tons LNG import capacity by building a new 4 million ton/yr LNG import terminal at Gopalpur on the country's east coast and expanding capacity of Dahej by 5 million tons to reach a total of 22.5 million tons.

The company expects that since its 5 million ton/yr expansion at Dahej will cost just one-tenth of the 60 billion rupees ($734 million) in the case of a similar new greenfield expansion, the LNG importer will reap good dividends when the capacity comes online in a couple of years.

Diversification

Petronet also seeks to invest 400 billion rupees ($5 billion) over the next five years as it aims to diversify business away from regasification by investing in a greenfield petrochemical plant in Dahej and also building a third jetty at Dahej that can import ethane and propane apart from LNG.

“This volatility is not impacting our future expansion plan. We are in process of diversifying our business,” Singh said.
Rakesh Sharma, New Delhi

Australia's Origin Energy Backs Takeover Proposal

Origin Energy is backing a non-binding takeover proposal from Canada's Brookfield Asset Management and private equity firm MidOcean Energy valuing the Australian power and LNG producer at around A$18.4 billion (US$11.9 billion).

The deal would effectively split Origin's activities, with Brookfield acquiring the energy markets business and MidOcean acquiring Origin's integrated gas business, which includes a 27.5% stake in the Australia Pacific LNG (APLNG) plant.

The two-train 9 million ton per year LNG facility — located on Curtis Island on Australia's East Coast — is jointly operated by ConocoPhillips (downstream) and Origin Energy (upstream). It is fed with coal seam gas from the Surat and Bowen basins.

APLNG has long-term contracts with Sinopec and Kansai Electric.

Origin is also Australia's largest energy retailer.

Third Attempt

The acquisition proposal is the third from Brookfield and MidOcean, a company set up by US infrastructure investor EIG Partners to develop a global portfolio of LNG assets.

The pair are offering A$9/share for Origin, after raising their previous bids of A$7.95/share and A$8.70 to A$8.90 per share.

However, the price would be lowered if Origin pays dividends before a deal is signed or increased by $0.03 per month if the acquisition takes place after May 15, 2023.

An eight-week due diligence process has been initiated to allow for a binding offer to be made.

Origin plans to unanimously recommend that shareholders vote in favor of the current proposal, in the absence of a superior offer and subject to the result of an independent expert review of the offer.

Growing Footprint

The proposal provides further evidence of EIG's strong appetite for Australian LNG assets.

The company signed a definitive share-transfer agreement with Japan's Tokyo Gas last month to acquire stakes in four LNG plants, namely Pluto, Gorgon, Queensland Curtis LNG (QCLNG) and Ichthys for US$2.15 billion.

Last year, EIG also signed a deal to buy Origin's 10% stake in APLNG, but the deal was pre-empted by ConocoPhillips.

"The project operates at globally competitive break-even costs and is well-positioned to meet growing LNG demand in the Asia-Pacific region," EIG said at the time.

Australia has proved attractive to infrastructure funds in recent years, with Global Infrastructure Partners acquiring stakes from Shell and TotalEnergies in midstream infrastructure at the Queensland Curtis LNG and Gladstone LNG plants, respectively.
Marc Roussot, Singapore


Data Snapshot

LNG Netbacks at Key Receiving Terminals

LNG Exporter Netbacks Between Key Receiving Ports
($/MMBtu)AlgeriaAustralia WestAustralia EastMalaysiaNigeriaNorwayOmanPeruQatarRussiaTrinidadUS GulfUS East Coast
Dahej, India19.0919.9118.7719.9817.7817.6321.2116.1820.9718.9317.1716.4117.30
Sodegaura, Japan18.0721.5021.5221.8817.618.0720.4114.3720.0822.7615.8313.3118.28
Zeebrugge, Belgium15.1110.939.7111.2513.7814.6613.009.7412.669.8714.0111.4114.25
Huelva, Spain18.6814.6113.4214.9217.3016.6416.6113.2016.3013.5617.3514.5517.37
Isle of Grain, UK9.315.183.995.488.088.857.544.026.914.148.235.678.46
Everett, US1.04-3.22-2.34-2.900.22-0.350.01-0.80-1.45-4.311.63----
Created with Highcharts 9.0.0($/MMBtu)QATAR TO NORTHEAST ASIANetbackNetback6. Jun20. Jun4. Jul18. Jul1. Aug15. Aug29. Aug12. Sep26. Sep10. Oct24. Oct7. Nov10203040506070Energy Intelligence

LNG Market Indicators

Spot LNG Pricing
Latest WGIDailyDaily Chg.Chg. From Latest WGI
NE Asia24.0023.750.15-0.25
SW Europe20.1019.44-0.03-0.66
Futures Pricing
($/MMBtu)Chg.LatestPreviousWeek Ago
Henry Hub, US (futures)0.376.245.875.98
NBP, UK (futures)-0.5130.2630.7735.38
European Spot Pricing
Chg.LatestPreviousWeek Ago
Dutch TTF-2.9926.3229.3123.33
Zeebrugge (Belgium)1.4711.7610.2912.25
German NCG-0.0725.7825.8522.82
NBP (UK)-0.0310.5410.5713.07
US Markets
US Spot Prices
Sabine Pass, Louisiana1.164.593.434.65
Corpus Christi, Texas4.134.130.004.25
Cove Point, Maryland0.662.752.091.14
Elba Island, Georgia--------
Nymex Henry Hub Futures
Near Month0.376.245.875.98
Second Mth0.396.616.236.33
Third Mth0.386.355.976.14
Created with Highcharts 9.0.0($/MMBtu)GLOBAL GAS PRICINGUS NymexDutch TTFNE AsiaDec '21Jan '22Feb '22Mar '22Apr '22May '22Jun '22Jul '22Aug '22Sep '22Oct '22Nov '220255075100125Energy Intelligence