Petrochem firms face raw material shortages

The energy minister has raised concerns about local petrochemical firms running out of raw materials, especially since they rely heavily on the by-product of gas-separation plants. 

He has ordered PTT to urgently prepare for new challenges as talks about overlapping territorial claims between Thailand and Cambodia have been prolonged causing a huge shortage of natural gas and its by-products. 

Energy Minister Arak Chonlatanon said that based on a report from the Department of Mineral Fuels, the amount of natural gas from fields located in the offshore Gulf of Thailand 

area would slowly decline over the next 12 to 18 months. This means that the country’s petrochemical industry, which has been relying heavily on raw materials made from natural gas, will face a major shortage in their manufacturing process. 

He called on PTT to come up with a plan to deal with such uncertainty, especially since negotiations between Thailand and Cambodia over territorial disputes have been delayed. Should the issue get settled in the next year or two, then it would take another 10 years before Thailand can start drilling for natural gas in the area. He said the petrochemical industry would need to make adjustments to deal with the situation when there is a low supply of natural gas. PTT has already started studying the issue. 

Since natural gas supplies from the Gulf of Thailand will reduce gradually, the local industry still has time to make adjustments. Most of the liquefied natural gas imported by PTT is being used to produce electricity, leaving no raw materials for the petrochemical sector. 

Songpope Polachan, director-general for the Department of Mineral Fuels, said the amount of natural gas brought from concession areas in the Gulf of Thailand will rise from 295 million square metres per day to 320 million sqm per day this year and up to 335 million sqm daily in 2013. From that, the production of natural gas will be maintained at 335 million sqm daily until 2017, but will drop to 311 million sqm in 2018 and down to 297 million sqm daily in 2019 and 268 million sqm per day in 2022.

The production of natural gas will possibly a strong decline in the next 10 years, in stark contrast to the demand of natural gas, which has been rising dramatically in line with the growth of the domestic economy. 

The Energy Ministry needs to find new energy sources to replace the drop in natural gas supply in Thailand. 

The Department of Mineral Fuels also expects the production of natural gas to drop heavily to just 44.5 million sqm per day 20 years from now.