PTT to import an additional 2m tonnes of LNG a year
PTT is preparing to import another 2 million tonnes a year of liquefied natural gas (LNG) to alleviate the loss of a gas supply from Joint Development Area Block 17, which Thailand must return to Malaysia in accordance to its contract under the JDA.
Meanwhile, PTT is confident that maintenance shutdowns of the gas pipelines from Myanmar and the JDA this year will not affect the stability of the domestic electricity supply.
Nuttachat Charuchinda, chief operating officer of PTT’s upstream petroleum and gas business group, said the company would try to secure a long-term contract for 1 million tonnes of LNG a year, with another 1 |million tonnes a year in the form of short-term (spot market) contracts.
However, since the current LNG price is still volatile, PTT does not have to rush to secure a long-term LNG import contract yet. The price formula PTT has in mind could be done in hybrid form to reduce the risk of high costs.
This year’s LNG spot-market price is quite volatile. Late last year, the LNG price was US$19 per million BTU (British thermal units), then slipped to $8 per million BTU last month, and to $6.8 per million BTU this week. This is lower than the price of the natural gas Thailand buys from Myanmar. Hence this is a good time for PTT to import some LNG to reduce reliance on natural gas obtained from the Gulf of Thailand without affecting consumers’ electricity rates.
The imported LNG will be delivered late this month, Nuttachat said.
Supply from Qatar
Previously, PTT established a 20-year supply contract for 2 million tonnes of LNG with Qatar Liquefied Gas Co. The first contract delivery from Qatar to PTT was 90,613 tonnes on January 8.
The additional 2 million tonnes of imported LNG this year will mean a total of 4 million tonnes. PTT’s LNG depot/terminal has the capacity to store up to 5 million tonnes a year.
Currently, PTT receives 755 million cubic feet per day (MMCFD) of natural gas from the JDA, which is about 68 per cent of total output, while Malaysia’s Petronas receives 32 per cent. However, according to a contract between the two countries, |PTT and Malaysia will soon get 50 per cent each, and the Thai company needs to make up the shortfall.
On the other issue, Nuttachat gave his assurance that the temporary suspension for maintenance of the gas pipeline from Yadana, Myanmar, from April 10-19 would not affect the stability of Thailand’s power supply, as PTT has prepared 120 million litres of bunker oil and 50 million litres of diesel fuel to run the power plants in Ratchaburi. The southern power plant will get natural gas via pipeline from eastern Thailand.
As for the temporary suspensions for maintenance of the gas pipeline from the JDA from June 7-13 and August 30 to September 8, which will mean a reduction of 420MMCFD, PTT has set aside 8 million litres of bunker oil and 15 million to 16 million litres of diesel to run the power plants in the South. Hence there should be no problem with power supply there either, Nuttachat said.
Thailand’s demand for natural gas this year is projected at about 4.8 billion to 4.9 billion cubic feet per day, which is relatively stable. Hence the reduced supply of natural gas from the JDA and the planned pipeline maintenance shutdowns should not have any adverse impact, he said.
