Thailand's state-owned PTT is reducing spot purchases of LNG for delivery in the second half of 2015 because of high spot prices and lower downstream consumption, a source closed to the buyer said Tuesday.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
The buyer has now cancelled its earlier plan to secure September spot volumes and is unlikely to secure additional cargoes for October.
Lower consumption is the result of an economy-driven slowdown in domestic power demand and industrial production.
"Our economy is weaker than we thought," he said.
In addition, rising spot offers, driven by tightness in the Asia Pacific markets, have made crude oil purchases and pipeline gas imports increasingly attractive for the Thai buyer.
"If the oil price stays low, [PTT] has the alternative not to buy LNG," the source said.
This year, PTT expects to receive 2 million mt of LNG from Qatargas as part of a 20-year contract signed in 2012, and has so far secured a total of six cargoes through tenders.