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Thailand provisionally supports LNG stockpiling idea
THAILAND
THE Thai government has given its provisional support to the idea of storing imported liquefied natural gas (LNG) in Gulf of Thailand fields.
But while Thai Energy Minister Sontirat Son- tijirawong acknowledged that historically low prices made imports of the fuel more attractive than some domestic production, he insisted that policymakers needed to discuss the matter further.
PTT president and CEO Chansin Treenucha- gron has called for cheap foreign gas supplies to be stockpiled. The netback from the Platts JKM dropped below -$1 per mmBtu (-$27.66 per 1,000 cubic metres) last week.
The Bangkok Post quoted Treenuchagron on April 28 as saying: “The record-low LNG prices may last to the end of this year, so we must import and store cheap gas in the Gulf of Thailand.”
The International Gas Union (IGU) said in a report this week that LNG prices were not expected to recover before winter 2020. The result, the IGU said, would be to undermine looming final investment decisions (FIDs).
“Due to the low LNG prices in 2019, and into 2020 amid a global LNG supply surplus and uncertainties in the trade environment, some of the proposed projects are seeing slower pro- gress towards FID,” the report said. “With the additional effect of [coronavirus] COVID-19 on stock markets, many companies, including those in the energy industry, are struggling financially, further delaying progress of projects.”
Cheap imports
PTT and state-run Electricity Generating Authority of Thailand (EGAT) have purchased six LNG cargoes – totalling 370,000 tonnes – from the spot market for arrival this year. Chansin said PTT’s four LNG shipments cost an average US$3 per mmBtu ($82.98 per 1,000
cubic metres) and that the first shipment had already arrived at Map Ta Phut.
Sontijirawong told The Bangkok Post that lower-cost gas could help the government save on power generation subsidies, which could amount to THB70bn ($2.16bn) this year. Gas accounts for 60% of the country’s power generation.
“We are looking at whatever we can do to trim down generation costs because the relief meas- ures for power bills come at a high cost,” Sonti- jirawong said, adding that spot LNG prices had become cheaper than Gulf of Thailand gas.
An unnamed industry source told the paper that, depending upon spot prices, this volume of imports could save THB4bn ($123.5mn) in power generation costs.
The minister, however, said he needed to speak to other policymakers before either com- pany increased their imports.
PTT granted EGAT access to 1.5mn tonnes per year (tpy) of capacity at the Map Ta Phut ter- minal, in Rayong Province, in 2019. This was the first phase of the country’s liberalisation of the gas import market, which has been dominated by PTT since it opened the terminal in 2011.
EGAT has received the first of its two ship- ments of 65,000 tonnes, with the second report- edly en route to Map Ta Phut facility. The utility said last year that the first was due to arrive in December 2019, with the second to follow in April 2020. PTT, meanwhile, is also understood to have received the first of four cargoes, with the remaining shipments to land between May and June.
The paper’s unnamed source said the Energy Regulatory Commission (ERC) believes Thai- land can import 660,000 tonnes of spot LNG without affecting other contracted supplies.
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w w w . N E W S B A S E . c o m Week 18 05•May•2020
