Thailand's largest utility to cut spot LNG imports, strike long-term deals
XLU•EGAT plans to reduce spot LNG reliance
Thailand's Electricity Generating Authority of Thailand (EGAT) is planning to halve its reliance on spot LNG purchases, strike long-term deals with suppliers in the Americas and boost domestic gas output to cut costs and ensure reliable supply, its governor said on Tuesday.
Thailand is among the countries hardest hit by the effective closure of the Strait of Hormuz due to the U.S.-Israeli war with Iran, as supplies from the Middle East, which accounted for nearly half of its oil and gas imports before the conflict, ground to a halt.
Long-term supply deals and import plans
State-owned EGAT, Thailand's largest utility, plans to cut the share of spot LNG imports to 15% from 30% and seek long-term supply deals with producers including those in the United States and Argentina, Governor Narin Phoawanich told Reuters.
Narin did not say when EGAT expects to reduce spot LNG purchases to that level.
The disruption to the key shipping route has forced the Southeast Asian nation to buy more LNG on the spot market, even as prices LNG-AS have more than doubled since the war began and hit their highest level since 2022 last week.
"The government will focus on long-term contracts. We are trying to find balance after the conflict started," Narin said, adding that EGAT plans to import 1 million metric tons of LNG a year over the next 20 years.
Power generation and renewable expansion
Narin said the utility would also build new gas-fired power plants and expand renewable energy capacity as it retires older, less efficient generating units.
