KUALA LUMPUR (June 25): Thailand's largest energy firm PTT Pcl is in no hurry to lock in new long-term liquefied natural gas (LNG) contracts as it monitors domestic gas output and the growth of renewables over the next 2-3 years, its chief executive said.
The country is expected to become more reliant on LNG imports because of falling output in the Gulf of Thailand, but natural gas demand growth has slowed to about 1% or less in the past 3-4 years because of increases in solar power, said PTT President and Chief Executive Officer Chansin Treenuchagron.
"Thailand is good in terms of power plan development and we have good alternative energy," Chansin told Reuters on the sidelines of the Asia Oil and Gas Conference.
Renewable energy sources are gaining ground as the cost of solar panels and wind turbines has dropped sharply, while climate change initiatives have also accelerated non-fossil fuel use.
Thailand currently consumes 4.7 billion cubic feet per day of natural gas, of which 3 billion cubic feet is from domestic production, 1 billion cubic feet is piped from Myanmar and the rest is imported LNG, Chansin said.
He expects natural gas demand growth in Thailand to hold steady at about 1% per year over the next five years.
PTT won the rights last year to take over production and development of the country's largest natural gas fields Erawat and Bongkot in the Gulf of Thailand from 2022-2023.
Production from the two fields was forecast to fall by half to 1.5 billion cubic feet per day in the next 5-10 years as the government is keen to sustain output over a longer period, Chansin said.
The gas fields are valuable to Thailand because they also produce condensate, an ultra light oil used for petrochemical production.
"If production decreases in Gulf of Thailand then we'll increase (LNG) imports," he said.
PTT has long-term LNG purchase contracts for 5.2 million tonnes per year (tpy) with Qatargas, Shell, BP and Petronas, but is also looking to ensure demand levels before pursuing new ones, Chansin said.
To prepare for more LNG imports, PTT is building a second 7.5 million tpy LNG terminal which will be completed in 2023, bringing its total LNG regasification capacity to 19 million tpy, he added.