PTTEP pursues quick reserve

"If the company decides to go ahead with the project, it has to hurry up with engineering design, which should take about one year, to ensure that construction will start next year or in 2013," Anon Sirisaengtaksin, president and chief executive officer of PTTEP, said yesterday.

Reserves should be at least 2 trillion cubic feet to meet the company's hurdle rate, or minimum acceptable return. PTTEP plans to produce 2 million tonnes of LNG per year from its floating LNG (FLNG) rig over 20 years.

The company's feasibility study is expected to come up with a total capital expenditure budget and financing approach, such as co-investing with a strategic partner.

Shell Co has already invested in an FLNG rig in Australia with annual capacity of 3.5 million tonnes. However, Shell's gas field is far away from PTTEP's surveyed area.

"There's great potential that PTTEP's exploratory area will have interesting reserves for investment," Anon said.

Although the company has been in the news lately as hot on pursuing mergers and acquisitions, he said no conclusion had been reached on fund mobilisation.

The company is still studying many investment platforms, including raising equity, divesting its existing businesses, issuing bonds and borrowing from banks.

"There's a lot of rumours that our company will raise between US$1 billion and $3 billion [Bt30 billion to Bt90 billion] in capital.

It's impossible for the company |to raise funds amid the volatile |stock market. We have no plan yet," he said.

Tevin Vongvanich, chief financial officer of PTT, said PTTEP's co-business plan was to increase its production capacity from the current 270,000 barrels of oil equivalent per day to 900,000 by 2020.

PTT is the major shareholder of PTTEP with a 65-per-cent stake.

"Whatever PTTEP decides on investment, PTT will not be an obstacle to its expansion plan under any investment strategy," Tevin said.