Thailand: Extra LNG eyed for long term

Thailand: Extra LNG eyed for long term

The government approved yesterday PTT Plc's purchase of 2 million tonnes of
liquefied natural gas (LNG) a year for 15-20 years to secure the country's
natural gas supply.

Energy Minister Anantaporn Kanjanarat said the National Energy Policy
Committee chaired by Prime Minister Prayut Chan-o-cha approved a long-term
plan for PTT to buy an additional 1 million tonnes of LNG per year each from
Shell Eastern Trading (PTE) Ltd and BP Singapore PTE Ltd. The first lot is
due to be delivered by the middle of next year.

The values of the long-term deals are estimated at about 115 billion baht,
or 20% cheaper than the previous deals thanks to lower oil prices. The
purchase plan must still receive cabinet approval.

The company currently has a long-term contract to buy 2 million tonnes of
LNG a year from Qatargas, while its expanded LNG receiving terminal in Map
Ta Phut will soon have a storage capacity of 10 million tonnes a year, up
from 5 million. The new terminal is expected to start operation by early
next year.

Tevin Vongvanich, PTT president and chief executive, said one reason it
needs to import more LNG is depleting natural gas in the Gulf of Thailand.
Its plan to diversify power sources by building coal power plants is still
staunchly opposed by environmental activists.

The company plans to import 3 million tonnes of LNG this year, rising to 5
million next year, he said.

Gen Anantaporn said the ministry is studying LNG domestic demand. The study
is likely to be completed next month.

Thailand is at risk of being short 6,300 megawatts of electricity in 2021
because of a possible disruption of up to 9 million tonnes of LNG stemming
from the lack of further investment in the Erawan and Bongkot gas fields,
said the Energy Policy and Planning Office (Eppo).

Production concessions for the two blocks -- Bongkot, operated by PTTEP, and
Erawan, operated by Chevron -- are due to expire in 2022-23.

Production is falling and the two operators are unlikely to invest more,
forcing Thailand to increasingly rely on imported LNG for power generation.
Thailand's LNG storage terminal capacity is only 11 million tonnes a year,
while demand stands at about 20 million tonnes, said Prasert Sinsukprasert,
the Eppo director-general.

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Ref:
http://www.bangkokpost.com/business/news/1095813/extra-lng-eyed-for-long-ter
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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com