Novatek, Thailand's PTT Plan to Implement LNG Projects

Russia’s Novatek announced on Wednesday that it will cooperate with Thailand’s PTT in fields of hydrocarbon exploration and LNG.

The two parties signed a memorandum of understanding (MOU) at a meeting between the Russian Prime Minister Dmitry Medvedev and the Prime Minister of Thailand Prayut Chan-o-cha.

According to the MoU, the parties intend to cooperate and study potential joint opportunities in the exploration and production of hydrocarbons, the implementation of LNG projects, the supply of LNG and the development of LNG markets, and the supply of liquid hydrocarbons.

"There are strong fundamentals for this joint cooperation. Novatek has high quality resources for the implementation of new LNG projects, while PTT is expanding LNG supplies to Thailand and is interested in the sustainability of such supplies to their domestic markets.  I’m certain we will be able to establish an optimal framework for efficient joint business development of our companies,” Chairman of Novatek’s Management Board Leonid Mikhelson said.

Thailand is looking to rely on imported LNG to meet domestic demand. Country’s Department of Mineral Fuels (DMF) has stated that drop in global gas prices has made it very attractive to import LNG as spot prices are now very close to the price of gas produced in Gulf of Thailand.

Last month, PTT and KOGAS signed an agreement to cooperate in the LNG value chain.

Thailand’s second LNG terminal with a capacity of 5 mtpa is expected to come online next year. The Map Ta Phut LNG receiving terminal is already operational and also has a capacity of 5 mtpa. PTT has plans to increase this capacity to ten mtpa.