Malaysia's Petronas set to supply Thailand's EGAT its first LNG imports

[BANGKOK] Malaysia's state oil and gas company Petronas has been selected to supply Thailand's state-run Electricity Generating Authority of Thailand its first liquefied natural gas (LNG) imports, a company spokesman told Reuters on Thursday.

Petronas has been selected out of 12 short-listed companies that also included Qatargas, Royal Dutch Shell, Chevron Corp, Total SA and Japan's Marubeni Corp .

Petronas and EGAT are still negotiating the terms of the contract, and EGAT is negotiating how much it will pay Thailand's PTT, an EGAT spokesman said.

EGAT currently buys gas from a state-owned unit of PTT Pcl . PTT and its subsidiary are Thailand's sole gas supplier and LNG importer.

Petronas officials could not be reached for comment due to a public holiday on Thursday.

The contract terms being negotiated could not be confirmed, but one source familiar with the discussions said price levels are in line with the market, at between 11 per cent and 12 per cent of Brent crude oil prices.

Thailand's largest power producer, EGAT, had expected to finalise purchase agreements by June and begin LNG shipments by September, a company official said in April.

But this could be delayed pending a final decision by the Thai government, three industry sources told Reuters.

"The government has raised the issue of take-or-pay and has questioned EGAT what it can do if it cannot take the contracted volumes," one of the sources said.

The EGAT spokesman declined to comment on the matter.

EGAT was initially asking for up to 1.5 million tonnes per year of LNG via Thailand's existing Map Ta Phut LNG receiving terminal in the eastern part of the country, to start from March 2019 for a period of four to eight years.

EGAT's imports are part of a government plan to boost competition in Thailand's power sector.

REUTERS