PTTEP looking for stake in LNG project in first half
PTT Exploration and Production (PTTEP) expects to finalise a deal to acquire stakes in a liquefied natural gas (LNG) project in the first half of the year as part of its merger-and-acquisition policy.
President and chief executive officer Anon Sirisaengtaksin said the company was in talks with a number of owners of natural-gas blocks in potential locations such as Australia, aiming to acquire stakes in at least one block within the first half. Under group policy, parent company PTT will sign a contract to purchase LNG from the gas block PTTEP acquires.
He said PTTEP had forecast that Thailand’s annual demand for LNG would be between 2 million and 4 million tonnes over the next five to seven years. Thailand now has to import all of its LNG, and the import figure last year was 1 million tonnes. However, LNG demand will change in accordance with the updated Power Development Plan (PDP) of the Energy Ministry.
Anon said that besides the PDP revision, other factors influencing LNG import were the natural-gas reserves in the Gulf of Thailand, and the possible success of petroleum development in the overlapping area between Thailand and Cambodia.
“Although it is not proved that the overlapping area has petroleum, the exploration in that area is one factor to determine LNG imports in the future. If PTTEP can take part in the development, and luckily it is a potential site for petroleum production, the demand for LNG import will be less than the current estimate,” he said.
Tevin Vongvanich, chief financial officer of PTT, said Thailand over the next five to seven years was anticipated to demand about 10 million tonnes of LNG, and all demand currently has to be imported. Therefore, PTT needs gradually to secure contracts to purchase LNG so as to serve the future demand. It is dealing with a number of natural-gas businesses to pave the way for PTTEP to negotiate with those operators to acquire stakes.
“The potential locations we’re looking for are in Australia, Qatar and the US. We may not acquire stakes in all gas blocks we have purchasing agreements with because it also depends on the willingness of operators in those blocks,” he said.
Anon said the deal to sell part of its stakes in the M11 petroleum block in Burma was close to finalisation. By the end of the first quarter, PTTEP expects to have new partners in that block. Only a couple of new partners are allowed to take part in the project, and PTTEP will reduce its share proportion to about 40-50 per cent from the current of 100 per cent.
The Burmese government has the right to hold a 20-per cent stake in the M11 block, which is the same condition in the M9 block for which PTTEP recently signed a contract with Burma.
