BP Sells LNG to Thai PTT in 20-yr Deal

The UK major BP is to sell about 1mn metric tons/yr of LNG to Thai energy conglomerate PTT for 20 years under a sales and purchase agreement announced December 29.

The contract starts in 2017 and BP said the LNG would come from its "diverse portfolio of LNG, including the Freeport LNG project in the US", which is due on stream in 2018. BP has a liquefaction tolling agreement for over 4.4mn mt/yr of its output. BP's head of integrated supply and trading Paul Reed said his company has a longstanding relationship with PTT. "Thailand has become a significant LNG market and this agreement with PTT further demonstrates our LNG supply capability in the region,” he said, but the commercial terms of the agreement were not disclosed.

US Henry Hub and other gas market indicators are likely to form a large part of the pricing calculations, rather than the traditional crude oil price.

William Powell