PTT, ministry work to cut domestic gas supplies
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THE ENERGY Ministry is working with PTT to cut natural-gas purchases from domestic sources to exploit the sharp plunge of LNG (liquefied natural gas) prices in the international market.
Energy Minister Anantaporn Kanjanarat also told reporters yesterday that the government had talked with Cambodian Prime Minister Hun Sen during his recent visit to Thailand about cooperating to develop petroleum deposits in the two countries’ overlapping area in the Gulf of Thailand.
An agreement could be reached by next year.
Twarath Sutabutr, director-general of the Energy Policy and Planning Office, said the National Energy Policy Council had recently agreed for the ministry to draw up a plan to purchase LNG from the spot market as long as it is cheaper than domestic gas.
Areepong Bhoocha-Oom, permanent secretary of the ministry, said that because LNG spot prices had fallen below the contractual prices of natural gas in some domestic fields, PTT should reduce its purchases from domestic sources and import LNG.
“This is in line with our strategy to prolong depleting domestic gas reserves,” he said.
At the current LNG spot price of US$7.8 per million British thermal units, some domestic fields such as the Platong block operated by Chevron in the Gulf of Thailand are selling gas at a higher rate, he said.
Out of about 4 billion cubic feet per day of gas purchased from domestic sources, about 1 billion is more expensive than LNG. However, up to 500 million cubic feet per day (mmcfd) of supply could be cut, he said.
Natural gas piped in from Myanmar is also costlier than LNG spot prices, but has a higher minimum volume of purchases, and reducing the purchases won’t help preserve domestic gas reserves, he said.
Veerasak Pungrassamee, director-general of the Mineral Fuels Department, said PTT had already started to cut gas purchases from domestic sources. However, considering the minimum contractual obligations, the maximum reduction of domestic gas supply could be only 300mmcfd.
Also, cutting all that amount could lead to an increase in the price of natural gas for vehicles (NGV) and the electricity tariff, as the specifications for LNG are different than for domestic gas.
The maximum domestic gas volume that can be cut without affecting NGV and electricity costs is about 60-80mmcfd, he said.
