Japan's Kyushu Electric and INPEX signed a memorandum of understanding with Thailand's PTT Global LNG and PTT International Trading on March 3, under which the companies will jointly consider LNG investments and procurements, a Kyushu Electric spokesperson told S&P Global Commodity Insights.
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Under the MOU, which was signed ahead of the 1st Asia Zero Emission Community, or AZEC, investment forum in Tokyo, the companies will jointly consider upstream-to-midstream LNG investments, the spokesperson said.
The move came as LNG is seen was a transition fuel for decarbonization, particularly in Asia.
The companies will also consider balancing LNG supply and demand together via efforts such as joint LNG procurements as well as utilizing reload and LNG storage facilities, the spokesperson said.
These latest deals follow an MOU signed in October 2021 by Kyushu Electric, PTT International Trading and Japan's INPEX, under which the companies agreed to cooperate in optimizing each company's LNG cargo, fleet and tank operations to ensure their LNG supplies in times of emergency.
Under the previous MOU, Kyushu Electric, PTT International Trading and INEPX agreed to jointly consider LNG spot cargo procurements and swap cargoes, as well as utilizing LNG reload and storage facilities in Japan and Thailand to optimize their LNG stocks during emergencies.
The companies will also look at accepting partners' LNG cargoes at their import terminals for swaps and reloads as well as jointly operate their tanker fleets among other possibilities in the event of emergencies.
For Japanese companies, such an emergency LNG supply framework might function as a supplementary one because Thailand does not have seasonal spikes in power demand as Japan does during the company's summer and winter seasons, a Kyushu Electric spokesperson said previously.
For Kyushu Electric, which imports a large amount of LNG from Australia, an emergency framework could work as a triangular supply network between Japan, Thailand and Australia, a source familiar with the matter had said.
Thailand's national oil company PTT, meanwhile, has been working to develop its regional LNG hub services in a move that will see the Southeast Asian country compete with regional rivals like Malaysia, Indonesia and Singapore.
Southeast Asia's LNG importers and exporters are gradually building LNG redistribution capabilities that allow full-sized shipments to be split into smaller parcels to supply downstream buyers in the region.