PTT Plc, the national oil and gas conglomerate, has sealed a deal to purchase 2.6 million tonnes of liquefied natural gas (LNG) a year from Mozambique's Rovuma Area 1 offshore project, says Piyasvasti Amranand, chairman of the board of directors.
Stakeholders in Rovuma A1 project, including PTT subsidiary PTTEP, are due to make a final investment decision by the end of this year. Gas production is scheduled to begin at the project in 2022-23, said Mr Piyasvasti.
PTT's board approved the purchase of LNG from the gas block last Friday and is in the process of reporting it to the National Energy Policy Council as well as the cabinet, he said.
Mr Piyasvasti said the gas sales agreement (GSA) is scheduled to be signed by PTT and relevant LNG production companies next year.
After sealing the deal, PTT could secure combined LNG supply of 7.8 million tonnes a year. Of the total, it has on-hand long-term purchasing contracts for a combined 5.2 million tonnes with Qatar Gas, Shell, BP and Petronas.
The price committed to buy from Rovuma A1 was slightly below the US$10-12 per million British thermal units found in its existing GSAs with Qatar Gas, Shell, BP and Petronas.
The long-term LNG purchasing contract is intended to help Thailand's gas market to avert price fluctuations, he said.
Mr Piyasvasti said he believed that although global oil prices are rising, the price of LNG that PTT has committed itself to buying would not rise above $16 per million British thermal unit, helping to cover the country's gas demand.
PTT recently finished developing a gasification facility in Rayong with storage capacity of 10 million tonnes.
Another unit with storage capacity of 1.5 million tonnes is expected to be developed next year.
Texas-based Anadarko Petroleum Corporation operates the Mozambique Rovuma A1 project.
The company and its partners have discovered about 75 trillion cubic feet of recoverable natural gas resources in Offshore Area 1, according to the Mozambique Mining Post's report.
In July the company finalised agreements with the government of Mozambique -- known as marine concessions -- which will allow it to design, build and operate the facilities for its LNG project.
Anadarko is developing Mozambique's first onshore LNG plant consisting of two initial LNG trains with total capacity of 12 million tonnes per annum.
Anadarko operates Offshore Area 1 with a 26.5% working interest.
PTT shares closed Friday on the Stock Exchange of Thailand at 406 baht, down eight baht, in heavy trade worth 3.15 billion baht.