BANGKOK: Thailand’s largest energy firm PTT plans to import at least five million tons of LNG in 2017, up from three million tons this year as local gas production fades.
State-controlled PTT expects to conclude in September talks with several suppliers including Royal Dutch Shell and BP to buy LNG under long-term contracts, chief executive Tevin Vongvanich told a news conference on Thursday.
Thailand, which uses natural gas for nearly 70 percent of its power generation, has become increasingly reliant on LNG imports as its own domestic gas fields are slowly being depleted. PTT is the nation’s sole gas provider.
Following a peak in 2006, Thailand’s natural gas reserves have generally declined. As of December 2015, Thailand held 7.8 trillion cubic feet of proved natural gas reserves, according to OGJ.
“As domestic resources decline, we are at the last phase of gas production,” Tevin said, adding that PTT aimed to buy at least three million tons of LNG via long-term contracts, as well as making purchases in spot markets.
Thailand currently has a long-term contract with Qatar for supplies of up to two million tons of LNG per year. Recent political unrest has stalled government incentives to attract more investment for upstream activities and led to a reduction in upstream investment by PTT. After several delays, Thailand plans to auction new licenses for 29 oil and natural gas blocks in the latter half of 2016.
Hit by the decline in global oil prices, PTT has cut its 2016 investment budget to 43.31 billion baht ($1.25 billion) and will focus more infrastructure including LNG terminals and gas pipelines, Tevin said.
PTT is in process of doubling the intake capacity of its five-million ton per year LNG import terminal at Map Ta Phut in the country’s east, which is expected to be completed in 2017, Tevin said.
The company also plans to spend about 50-100 million baht supporting clean energy technology, chief financial officer Wirat Uanarumit said.
PTT expects to continue to make profit in the second half of the year, with lower feed gas costs supporting its core gas business, Wirat said. Unlike the first half, PTT has no major shutdowns planned for the latter half of the year, he said.
On Monday, PTT reported a 4.8-percent rise in second quarter net profit as its strong gas business outweighed the weak performance of its petrochemical and refining businesses.
