BANGKOK -- Thailand's state-owned energy conglomerate PTT has shipped liquefied natural gas to Japan for the first time as it looks to re-export fuel for power plants to energy-hungry countries.
The first shipment left a PTT terminal in central Thailand late last month and arrived this week in Japan, which is experiencing a seasonal supply shortage, Nikkei Asia has learned. The unidentified buyer is thought to be a major energy company.
The cargo of roughly 145,000 cu. meters is enough to power 50 million households for one day, provided the entire volume is used for thermal power generation.
PTT will "explore more opportunities," tapping the country's "infrastructure and proximity to Japan, South Korea, China and Taiwan, all of which are big LNG buyers," a source at the company told Nikkei Asia.
Thailand has a glut of LNG due to a lack of winter heating demand and the pandemic, which is throttling industrial electricity usage.
But demand is surging elsewhere, tripling spot prices in Asia over a one-month period through mid-January to a record high of more than $30 per million British thermal units at one point.
PTT likely charged spot prices when selling the LNG to Japan after buying it at a lower cost under long-term agreements, thereby pocketing a hefty profit. As the biggest publicly traded company in Thailand by market capitalization, PTT buys LNG from Malaysia and Qatar, mostly under long-term contracts.
Projecting more domestic demand for electricity, Thailand -- which mainly uses locally produced natural gas for its energy needs -- plans to increase procurement and is expanding import terminals, with a second facility slated for completion next year. But this strategy comes at the risk of being stuck with a surplus if demand declines at home.
Re-exporting excess LNG to other countries solves this problem while creating a new source of income and reducing the cost of LNG storage.
The Thai government even envisions transforming the country into an international LNG trading hub.