Thailand’s Gulf Energy is evaluating an LNG contract for seven cargoes per year for 2025-2026 that is JKM-linked with competitive offers at JKM full-month average minus 20-30 cents/MMBtu, sources told S&P Global Commodity Insights this week.
Market sources said that the offers were valid for two weeks before Gulf Energy announces the final winner around mid-October.
Gulf Energy was looking to procure the volumes through bilateral negotiations, sources said.
Several suppliers noted that Gulf Energy might consider awarding more than the required volume of seven cargoes per year from multiple suppliers, provided the prices are favorable.
Under this new contract, the cargoes will be delivered to the Map Ta Phut LNG Terminal, and will be supplied to both Gulf Energy and Hin Kong Power, a joint venture which Gulf Energy owns a 49% stake, according to sources.
Gulf Energy did not immediately respond to requests for comment.
The company has not begun LNG imports for itself after having received its shipper license in 2020, for importing 300,000 metric tons of LNG a year.
In February 2024, Gulf Energy announced the arrival of the first cargo imported by Hin Kong Power. The cargo was delivered based on a two-year contract, which Gunvor supplies around 0.5 metric ton per year of LNG to Hin Kong Power on a DES basis.
Southeast Asia Marker (SEAM), the LNG price which reflects the price of LNG cargoes delivered to Thailand and Southeast Asia, was assessed at $12.725/MMBtu for November Oct. 9, at a discount of 20.5 cents/MMBtu to JKM.
The monthly JKM-SEAM spread primarily sets within the range of 20-30 cents/MMBtu.
Pricing basis
The recent Thai agreements signal that JKM continue to be the preferred pricing basis for Thailand’s short-term contracts.
Market sources said the Gunvor-Hin Kong Power contract announced in September 2023 was JKM-linked.
In June 2024, State-owned Electricity Generating Authority of Thailand (EGAT) awarded an LNG purchase tender for supply over 2025-2027 to Gunvor Singapore Pte. Ltd on JKM basis at JKM minus 25-30 cents/MMBtu, Commodity Insights reported earlier.
EGAT has another contract that was awarded in 2023 for 1.2 million metric tons of LNG for delivery over 2024-2027 to BP and PetroChina with “significant discounts” to the JKM, according to multiple market sources.
Spot market purchases by Thai buyers also typically done on either a fixed price basis or on JKM-linked basis, sources said.
The Energy Policy and Planning Office, part of the Thai Ministry of Energy, has asked for LNG procurement for short-term and spot contracts with a duration of less than five years not to exceed the JKM price adjusted with a constant value, which has not been disclosed yet. However, trade sources believed the value to be correlated with market conditions.
