More LNG import needed in view of gas supply loss
The Energy Ministry will ask PTT to import another 3 million tonnes of liquefied natural gas this year to fill the LNG depot to its maximum capacity to compensate for the upcoming loss of a gas supply from a joint Thai-Malay block.
In accordance with a contract under the Joint Development Agreement between the two countries, natural gas from JDA Block 17 will revert to Malaysia’s Petronas as of April 1. Puangthip Silpasart, director-general of the Mineral Fuels Department, said a meeting chaired by ministry permanent secretary Areepong Bhoocha-oom is scheduled for next week to find ways to fill the resulting gas shortfall.
Under the JDA, Thailand and Malaysia agreed to share the natural gas produced from Block 17 equally. In the early stage of the agreement, Malaysia had less demand for natural gas, prompting Thailand (represented by PTT) to buy 370 million cubic feet a day from Malaysia’s share of the gas. That purchase contract will expire on April 1, leaving PTT with only 70MMCFD. Thailand will have to come up with a solution to fill this 300MMCFD shortfall in the near future.
Areepong suggested that relevant state agencies consider securing purchase contracts for 3 million tonnes a year to fill Thailand’s LNG depot to capacity. The price of natural gas in the world’s markets as of last month had declined along with crude-oil prices.
Meanwhile, PTT chairman Piyasvasti Amranand said the Energy Ministry’s policy to reduce domestic gas production and import LNG to fill the void partially was something that should be considered carefully. Although LNG prices have fallen, its use entails additional transport costs, and the expense of converting it from the liquid state into gas.
