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Thai oil, gas major PTT seeks new suppliers

Thai oil, gas major PTT seeks new suppliers

BANGKOK: Thailand’s state-run oil and gas company PTT plans to massively expand its LNG import capacity and ramp up overseas development again, CEO Tevin Vongvanich told the Nikkei Asian Review, in search of alternatives to dwindling domestic resources.

While work is ongoing to more than double the capacity of its only liquefied natural gas terminal, located in the cental province of Rayong, from 5 million tons to 11.5 million tons by mid-year, Tevin said that further expansion plans are already in the pipeline. A second terminal will be built nearby that can handle 7.5 million tons a year, bringing the total receiving capacity to 19 million tons, nearly four times the current capacity.

The project has been approved by the government, and an environmental assessment is underway. “We aim to start construction in the next three years, which will take around four to five years, and bring it online in 2023 or 2024,” Tevin said.

PTT recently agreed on a 15-year contract to buy 1.2 million tons of LNG annually from Malaysia’s Petronas, alongside existing deals with Qatargas, Royal Dutch Shell and BP. It is looking for long-term suppliers in Australia, North America and Africa as well. The company also plans to step up spot procurement, which accounts for a third of its imports. Tevin aims to use all 19 million tons of PTT’s planned capacity by 2030.

The state-run enterprise is the sole LNG importer in Thailand, Southeast Asia’s largest buyer of the fuel. The country boosted LNG imports by 50% last year to 3 million tons to substitute for domestic production — its proven natural gas reserves are on course to run out in seven years at current output levels. Tevin’s 2030 target of 19 million tons is a quarter of what Japan, the world’s top LNG buyer, currently imports annually.

In addition to supply contracts, PTT is eyeing production of its own outside Thailand. Subsidiary PTT Exploration and Production holds an 8.5% interest in the Rovuma Offshore Area 1 project in Mozambique. The block is among the world’s richest gas fields, with annual LNG output projected at 12 million tons. Based on these numbers, PTT would be entitled to about 1 million tons a year — a substantial contribution to Thailand’s energy supply, around 5% of the 19 million tons targeted for 2030.