Thailand imports more LNG in December

Thailand's December 2021 LNG imports rose on the month and on the year, likely as domestic gas production continued to fall.

Thailand imported 700,982t of LNG in December, higher by 11.1pc from 630,836t in November and up by 88.2pc from 372,411t in December 2020. Thailand last received higher volumes in May 2021 when it imported 703,155t.

Thailand's December imports brought its full-year LNG receipts to 6.69mn t in 2021, up from 5.61mn t in 2020. There are expectations that Thailand could ramp up its LNG imports this year following the exit of some international oil and gas majors from Myanmar because of the worsening political situation and the establishment of joint-venture B Grimm Power LNG that could boost import volumes by up to 1.2mn t/yr this year.

Thailand's Energy Policy and Planning Office (EPPO) has not published domestic production and pipeline imports data for December. But market participants suggest that imports may have extended their falls - which began in July - in December, encouraging increased demand for LNG imports to make up for the shortfall.

Production at the Erawan gas field, one of the country's two biggest offshore natural gas blocks, has been falling since July from a dispute surrounding a handover of operations from operator Chevron to PTT Exploration and Production (PTTEP). PTTEP will take over operations when Chevron's licence expires in April 2022.

Erawan's production fell to 607mn ft³/d in November, down from 663mn ft³/d in October and nearly half from the 1.139bn ft³/d in November 2020, according to EPPO data.

The rise in Thailand's LNG imports in December was led by a surge in receipts from Australia, which overtook Qatar to become Thailand's top LNG supplier for the month. It delivered 274,132t of LNG, the highest volume Australia has ever shipped to Thailand, and made up 39.1pc of Thailand's total LNG receipts in December. This is an increase from the 73,817t it delivered to Thailand in November, and without any LNG shipments a year earlier.

Thailand also received 182,543t of LNG, or 26pc of its LNG volumes, in December from Malaysia after receiving 116,944t in November and no volumes at all in December 2020.

Thailand likely purchased three spot cargoes for deliveries in December, more than the two spot cargoes it purchased for delivery in November.

State-controlled Egat purchased a cargo for delivery on 10-12 or 14-16 December to the 11.5mn t/yr Map Ta Phut terminal likely at a discount to a northeast Asian spot LNG December price through a tender that closed on 20 October. Thailand's state-owned PTT also procured a 3-5 December delivery to Map Ta Phut as part of a two-cargo strip tender that closed on 26 October. It likely paid a low-$33/mn Btu for a Qatari-sourced cargo, market participants said.

Egat may have most recently procured another December delivery across 16-18 or 21-23 of the month through a tender it closed on 12 November, but this could not be confirmed.

Thailand paid an average of $17.265/mn Btu for its December supplies, higher than the $15.692/mn Btu it paid in November, and significantly higher than the $6.38/mn Btu it paid in December 2020. This is in line with the rise in Asian spot LNG prices.

The ANEA price, the Argus assessment for spot LNG deliveries to northeast Asia, averaged $32.097/mn Btu for deliveries in first-half December and $34.155/mn Btu for deliveries in second-half December compared with $6.077/mn Btu and $6.523/mn Btu for deliveries in first- and second-half December a year earlier, respectively. An increase in European gas hub prices thanks to uncertainty surrounding Russian gas supplies across peak heating season lent support to Asian spot LNG prices.

Australia's shipments to Thailand cost the most in December at an average of $27.957/mn Btu, while Malaysia's shipments were the lowest priced at $9.129/mn Btu.

By Subethira Ahrumugam