Regional LNG: Thailand to ink 1st LNG import deal: Report

Thailand hopes to secure its first preliminary liquefied natural gas (LNG) supply deals by the end of the year, clearing the way for imports to begin by early 2011, a top gas official said on Tuesday as quoted by Reuters.

"We are targetting memoranda of understanding (MOUs) by the end of the year," Chitrapongse Kwangsukstith, senior executive vice president of the gas business group at Thailand's PTT, told reporters on the sidelines of an industry conference.

PTT PCL , Thailand's top energy firm charged by the government with pursuing an LNG terminal to meet the country's rapidly rising natural gas demand, has also commissioned an engineering firm to begin a feasibility study on the project, he said.

The estimated $500 million terminal is to be built by power firms Ratchaburi Electricity Generating Holding and Electricity Generating PCL , officials said last year.

PTT is in talks with regional LNG suppliers Malaysia and Indonesia as well as Middle East exporters, he added.

Chitrapongse said talks had been tough as sellers held out for higher prices on hopes soaring demand for the cleaner-burning fossil fuel from China and the United States would keep demand firm for the next five years.

Thailand is also competing with major buyers in leading LNG consumers South Korea and Japan who have decades-long contracts due for renewal around 2010.

PTT is pushing producers to sell it natural gas partly indexed to the cost of the pipeline supplies it now receives from offshore producers and northern neighbour Myanmar, reducing the influence of oil prices in LNG contracts, he said.

Thailand hopes to build the 5 million-tonne-per-year (tpy) terminal on the east coast of the Gulf of Thailand by 2010 to meet demand for natural gas from the power sector and industry. (*)