LNG

Thailand national energy company PTT Exploration and Production (PTTEP), whose LNG assets include a stake in the Mozambique LNG export project in Area 1 of the Rovuma Basin, reported a 23 percent jump in first-quarter net income as it secured more exploration acreage and a floating LNG stake in Malaysia.

Thailand is securing its domestic production of natural gas in the Gulf of Thailand, as well as its pricing, while expecting more LNG volumes from Mozambique and elsewhere and constructing a new LNG import terminal.

Thai state energy company PTT Exploration and Production (PTTEP) said its development subsidiary was on track to take over operatorship from Chevron Corp. of the Erawan natural gas field in the Gulf of Thailand and has proposed a consumer price to the government equivalent to $3.70 per million British thermal units.

PTTEP takes over the Erawan field in 2022 to add to its operatorship of the nearby Bongkot natural gas field.

“The company is confident that its proposals will deliver benefits to all parties and ensure energy security to the country,” said Phongsthorn Thavisin, PTTEP President and Chief Executive, after the signing ceremony just held for the Production Sharing Contracts (PSCs) for the G1/61 field (Erawan) and the G2/61 field (Bongkot).

“The continuity of natural gas supply is the top priority of the government and the operators, we believe, as the benefits will be brought directly to the country and the Thai people. The state agencies are determined to smoothly proceed the transition of operations and we have already prepared for this process,” added the CEO.

For its LNG supplies, PTTEP is a 10 percent shareholder in the Area 1 licence of the Rovuma Basin offshore Mozambique held by Anadarko Petroleum of the US.

The Thai company said the first phase of LNG production in the southeast African nation is planned for 2024 with initial volumes of 12 million tonnes per annum.

Thailand is planning a second import terminal not far from its existing import facility at Map Ta Phut in the eastern province of Rayong.

The new Nong Fab terminal will have a maximum receiving capacity of 9 MTPA.

PTTEP said initial investments in the Gulf of Thailand domestic production would be around $320 million and would ensure production volumes from both fields.

The company plans to safeguard production volumes in the Bongkot and Erawan fields of at least 700 million cubic feet per day and 800 million cubic feet per day respectively.

The investment includes the drilling campaign of the exploration and production wells and the construction of additional wellhead platforms.

“From 2022 onward, about 80 percent of the natural gas production in the Gulf of Thailand will be under our operations,” said Phongsthorn.

“This means PTTEP will become the largest producer of natural gas in the country, demonstrating our success in carrying out the mission to establish energy security to Thailand,” he stated.

Phongsthorn explained that commitment in the PSC will benefit the state, the Thai people and the future revenues of PTTEP.

The CEO said a price constant of 116 Thai baht per MMBtu ($3.70 per MMBtu) had been proposed to the government.

“This is reasonable and will bring benefits to the state and the Thai people,” he added.

“Having the Erawan field in its portfolio will contribute higher gas production volumes as well as increased revenues for PTTEP,” he added with expectations of bringing down the operational costs by between 20 percent and 25 percent.

“Through the comprehensive analysis, we are confident that our proposals submitted in the bid will create mutual benefits to all relevant parties,” he stated.

Thailand’s national energy company, PTT Exploration and Production Public Co, said it would speed up its final investment decision process for its stake in the Mozambique LNG project as it posted annual net profits of 36,202 Thai baht ($1.120 billion), a jump of almost 90 percent on its earnings in the previous year because of higher sales volumes and price.

Thailand’s state energy company PTT Exploration and Production said that the Mozambique LNG export project it is a part of is progressing well towards a final investment decision in the first half of 2019 as the joint venture partners sold more volumes.