THURSDAY, March 28, 2024
nationthailand

‘Power shortage’ if newcomers win gas deals

‘Power shortage’ if newcomers win gas deals

THAILAND COULD face a power shortage in 2020 and 2021 if newcomers win the upcoming petroleum auctions and current gas producers cut their investments prior to the handover, a senior energy official has warned.

Prasert Sinsukprasert, deputy director-general of the Energy Policy and Planning Office (EPPO), told a seminar held by the Economic Reporters Association yesterday that the recent decision by the National Energy Policy Council (NEPO) to organise open bidding for the Erawan and Bongkot gas fields to find new operators after the current concessions expire in 2022-2023, put the country’s energy-supply security at risk.
“The worst case is that there is not enough gas for running power plants. [The country would] have to conserve power. [We] may have to ask shopping malls to reduce their electricity consumption, or use more severe measures,” he said.
“Right now, we are still not faced with such a problem, but there is a risk if the existing producers don’t get [the concessions],” the official told the seminar.
The Erawan and Bongkot concessions, currently operated by Chevron Thailand Exploration and Production and PTT Exploration and Production (PTTEP), respectively, together produce natural gas that accounts for 44 per cent of all gas procurement for  the country.
Prasert said that if newcomers won the auctions, which are expected to take place next year, existing producers may cut their investments prior to the end of their concessions – and consequently their gas production could be reduced by 1,500 million cubic feet per day.
In this worst-case assumption, the gas shortfall would mean a loss of 6,300 megawatts of electricity production capacity during 2020 and 2021.
 
Total capacity 
Thailand’s total installed power capacity is currently about 40,645MW.
Prasert said the government was considering various ways to fix the possible shortfall in gas supply, including construction of a floating terminal to import more liquefied natural gas (LNG), using other fuels to run the country’s power plants, and increasing renewable power production.
Additional coal-fired power projects, if plans for them got off the ground, would also be very helpful, he added.
“I insist that I would use every means possible to prevent a power blackout. I worry about it … I will try my best. This [what I say about a potential blackout] is not a threat,” he said.
Thitisak Boonpramote, head of the Mining and Petroleum Engineering Department at Chulalongkorn University, told the seminar that the market mechanism would not necessarily work in the auction system, in that bidders would have what he called an “asymmetry” of information.
“I don’t believe others would know better than Chevron and PTTEP, which have been with the fields for 30 years,” he said.
The academic suggested that the government amend petroleum regulations for producers to provide more returns to the state than required under the current “Thailand III” regime, and that it reformulate the gas-purchase contracts in a way that was fair but with prices no higher than current ones – and no higher than the price of LNG imports.
Auttapol Rerkpiboon, senior executive vice president of PTT, told the seminar that PTT’s LNG-receiving facilities would have insufficient capacity to service the shortfall of domestic gas production based on the worst-case scenario projected by the EPPO at 1,500 million cubic feet per day in 2021, which was equivalent to 9 million tonnes of LNG.
 
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