Thailand: PTT told to mull LNG terminal in South

Thailand: PTT told to mull LNG terminal in South

PTT Plc, the national oil and gas conglomerate, is considering building a
new liquefied natural gas (LNG) terminal in a southern province at the
request of the government, says executive vice-president Pitak Janyapong.

"The idea to invest in this project has come after a government request for
us to seek an alternative power supply for the southern provinces if the
controversial coal-fired power plant project in Krabi is scrapped," said Mr
Pitak.

He said one option energy policymakers are considering is building a
gas-fired power plant and PTT would be responsible for securing the natural
gas supply to feed the plant.

Two locations where the company is conducting a feasibility study are the
Thepha and Chana districts in Songkhla province.

Thepha may be the more viable choice for constructing a new LNG receiving
terminal because it is closer to the Gulf of Thailand than Chana, meaning it
would require less capital to invest in a new gas pipeline linking it to the
gas fields, said Mr Pitak.

The feasibility study is scheduled to be finished in May, when it will be
sent to the government for consideration.

"We are still studying the matter so we can't say how much we would need to
invest or what the capacity should be. We don't even know if the coal-fired
power plant project will be scrapped," he said.

If the government decides to approve a new LNG terminal in the South, it
would require extra capital investment as PTT has already set aside nearly
40 billion baht for expanding the LNG receiving terminal in Map Ta Phut to
raise capacity to 11.5 million tonnes a year, up from 10 million. A second
unit of the LNG receiving terminal in Nong Fab with a capacity of 7.5
million tonnes a year is also planned.

The gas plan aims to increase storage capacity of the country's LNG
receiving terminals to 19 million tonnes by 2022, up from 5.2 million.

In related news, PTT wants to join its subsidiary PTT Exploration and
Production (PTTEP) and enter the power sector soon.

Recently, PTT chief executive and president Tevin Vongvanich said the
company is studying facilities for energy storage technology, electrical
vehicles and smart grid power distribution businesses.

Over the past two weeks, a group of anti-coal protesters succeeded in
pressuring the government to retract its decision to start the construction
of the coal-fired power plant in Krabi. Instead the administration ordered
the Electricity Generating Authority of Thailand (Egat) to redo an
environmental and health impact assessment report.

Assuming the coal plant is built, the move delays commercial operation from
mid-2019 to the end of 2021. The 800-megawatt plant was planned to serve
rapidly rising power demand in the South, boosted by the influx of tourist
arrivals.

Amid the uncertainty, the government has sought out a contingency plan,
saying the country cannot afford the damage caused by a power shortage.

The Energy Ministry reports the South's power demand has grown at an average
of 4.2% a year over the past decade, compared with 2-3% annual growth in the
central region.

Egat said earlier it prepared three long-term solutions if the Krabi
coal-fired plant project is scrapped: first, the development of a floating
storage and re-gasification unit (FSRU) in the Andaman Sea; second,
modifying fuel usage of existing Krabi bunker-oil plants for natural gas and
increasing their capacity; and third, building another gas-fired plant.

All of these options rely on natural gas imports, which could become costly.

Egat is also pushing to complete a 63.2-billion-baht high-voltage
transmission line (HVTL) project in the region by year-end.

The controversial coal plant coupled with rising demand for electricity in
the South have had energy policymakers concerned. The Energy Ministry
estimates electricity supply shortages in the southern provinces will
probably start in mid-2019. The HVTL project will provide a stopgap until a
new plant is ready to feed the power grid in the area.

Egat said peak power demand in the southern provinces last year was 2,801MW
and this year it is expected to rise to 3,000MW.

The government also has to decide on a clear direction for the new round of
bidding for concessions in the Gulf of Thailand's Bongkot and Erawan gas
fields.

The concessions have faced long delays because of conflicts between the
energy industry and activists over the appropriate formula for sharing
benefits from the petroleum fields.

The concessions to operate the Bongkot and Erawan gas fields are due to
expire in 2022 and 2023, respectively.

A final decision on the blocks is due to be made this year.

The Bongkot block is operated by PTTEP, while the Erawan block is operated
by Chevron Offshore Thailand.

PTT shares closed on the Stock Exchange of Thailand on Friday at 399 baht,
up one baht, in heavy trade worth 1.34 billion baht.

--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

Link to Original Article:
http://www.bangkokpost.com/business/news/1205497/ptt-told-to-mull-lng-termin
al-in-south

--- --- --- --- --- --- --- --- --- --- --- --- --- --- ---

John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com