LNG

Thailand’s state-run energy firm, Public Company Exploration and Production (PTTEP), has ramped up offshore domestic natural gas production and the nation is expected to require less LNG after last year’s surge of more than 32 percent in additional cargoes.

PTTEP said production has increased at the G1-61 gas project comprising the Erawan, Platong, Satun and Funan fields in the Gulf of Thailand.

The Thai company said that sales volume for the G1-61 project had now reached 800 million cubic feet per day (MMscf per day) as planned in a country were gas-fired generation is the main power source.

“The increased gas delivery will help lower electricity prices and enhance national energy security,” said PTTEP.

Domestic gas expansion

Montri Rawanchaikul, Chief Executive of PTTEP, noted that PTTEP won the bid for the G1/61 project in the Gulf of Thailand from the Department of Mineral Fuels in 2018 and signed the production sharing contract (PSC) in 2019.

“After becoming the operator, PTTEP put all its efforts into speeding up the production rate and improving the integrity of facilities and equipment to ensure safety,” Montri explained.

“To date, 12 wellhead platforms and subsea pipelines were installed, along with the drilling campaign of more than 300 producing wells,” he added.

“The gas delivery increased to 800 MMscf per day on March 20, 2024, to meet rising energy demand and support Thailand’s economy,” the CEO stated.

The natural gas supply for Thailand comes from a mix of domestic production sources, LNG imports and pipeline gas deliveries from neighbouring Myanmar.

The two Thai LNG import terminals have a combined six storage tanks and are operated by a PTTEP subsidiary, PTT LNG.

The LNG import facilities are called Map Ta Phut Terminal 1 and Map Ta Phut Terminal 2 with nominal capacities of 11.5 MTPA and 7.5 MTPA respectively.

The country imported 11.55 million tonnes of LNG in 2023, up more than 32 percent year-on-year from the 8.72MT received in 2022.

In addition to the rising natural gas production Thailand also imports around 588 MMcf per day of natural gas from Myanmar.

Analysts said that the outlook for LNG imports in 2024 could be more subdued than in 2023 owing to the Ministry of Energy's plans to minimize LNG deliveries and reduce power costs.

Gas priority

“Increasing natural gas delivery from the G1-61 Project has been PTTEP’s priority over the past two years,” CEO Montri said.

“As gas from the Gulf of Thailand is a primary source of energy serving both households and industries, PTTEP, therefore has accelerated all operations,” he added.

“This achievement is attributed to the determination of all employees and supports from the government and related agencies to not only mitigate the impact of energy prices but also sustain energy security for the country,” Montri declared.

PTTEP will continue its annual workplan by installing new wellhead platforms and drilling the hundreds of new wells for the G1-61 project.

The CEO stated that for 2024 funds of around 30 billion Thai baht ($830 million) had been set aside for the G1-61 project work plan as it was one of the primary sources of Thailand’s energy security.

POSCO International, the energy unit of the South Korean steel-producing and industrial group, has joined with Indonesian state-owned oil and gas company PT Pertamina to win the exploration and production licence for the Bunga gas block offshore Java as Korea's LNG import facilities are expanding.

“A consortium involving POSCO International and Indonesian state-owned PT Pertamina Hulu Energy (PHE) obtained the rights from the Indonesian government to explore the Bunga natural gas block off the eastern Java Island,” said POSCO in a statement.

The two will each own a 50 percent stake in the project and POSCO International will be the operator.

POSCO explained that the award followed a joint study of the 8,500 square kilometres Bunga block with Pertamina Hulu Energi, a 100 percent subsidiary of Pertamina.

The Korean company is expected to direct any natural gas resources to possible LNG export possibilities.

Imports

POSCO International, which was newly branded as a company after the merger with POSCO Energy, noted that it is the only energy company in Korea that has an LNG value chain from exploration to production, storage and power generation.

It also has natural gas interests in Myanmar and Australia and has been carrying out gas exploration offshore Malaysia since 2021.

POSCO has firm plans to increase LNG imports and held a ground-breaking ceremony at the end of January 2023 for a planned new import facility near the site of the existing Gwangyang facility in South Jeolla province.

The company plans to invest 930 billion Korean won ($757 million) to build the terminal with two LNG storage tanks, each with 200,000 cubic metres capacity, to provide power for the steel mills and more electricity for the region.

In addition to the existing Gwangyang terminal, Korea has six other facilities at Boryeong, Incheon, Jeju, Pyeongtaek, Samcheok and Tong-Yeong.

POSCO said it regarded the new terminal as “another growth engine for Korean industry at Gwangyang” where the first LNG facility started operations in 2005.

Japanese LNG industry participants, export plant operator Inpex Corp. and engineering company JGC Holdings are teaming up with the Thai national energy provider, which has increasing natural gas and LNG stakes, to develop a carbon-capture and storage (CCS) project in Thailand.

Thailand’s Public Company Exploration and Production (PTTEP) has stakes in Malaysian floating LNG as well as in Mozambique LNG and is taking over the operatorship of the main natural gas field in neighbouring Myanmar.

While all three companies are heavily involved in the energy transition on fuels in their promotion of LNG and pipeline gas, with Inpex operating the Ichthys LNG plant near Darwin in Australia and JGC being a builder of LNG plants and terminals, they are now exploring Southeast Asian CCS prospects.

They said the potential development of the CCS project in Thailand would help reduce greenhouse-gas emissions and accelerate the decarbonization of Thai industries and the country as a whole.

Studies and solutions

Inpex, JGC and PTTEP have now signed an accord on the Thailand Carbon-Capture and Storage Initiative, which aims to study the potential development of CCS solutions to help industries including the oil and gas sector, hard-to-abate industries and power generation reduce their carbon-dioxide emissions.

CCS involves capturing CO2 from industrial processes before it enters the atmosphere and transporting the CO2 for underground storage in geological formations where they will be appropriately managed and monitored.

“The collaboration will involve identifying and evaluating facilities as well as procedures and technologies concerning CCS to build economically viable CCS solutions for Thailand,” said a statement.

PTTEP said the initiative reflected its determination to take part in regional efforts to manage and mitigate GHG impacts.

“We have the potential to help industries and Thailand reduce carbon emissions and achieve carbon neutrality goals,” the Thai company added.

Reforms

Inpex said it was proactively engaging in energy structure reforms towards the realization of a net-zero carbon society by 2050 while responding to the energy demands of Japan and other countries.

“The company aims to create clean energy business opportunities centred on CCS in Thailand with a view to expanding these opportunities to other parts of Asia,” said Inpex, whose headquarters are in Minato City in Tokyo.

JGC, based in Yokohama, noted that among the three it had “a rich track record” of building CCS facilities not only in Japan, but also in Algeria and Australia.

“The company also provides technical consulting services with energy and environmental themes, combining various methods such as surveys, analysis and evaluation, simulation, and risk assessment, and contributing to the realization of CCS through the provision of a wide range of solutions,” it explained.

This Japanese corporate collaboration on the Thailand CCS initiative is linked to the Asia Energy Transition Initiative (AETI), a plan unveiled by the Government of Japan in 2021 that aims to help achieve sustainable economic growth and carbon neutrality in Asia through energy transitions. 

Woodside Petroleum has joined to new politicised trend for energy companies to make political investment decisions after several years of intimidation by banks and environmental activists on climate change by shutting down a natural gas project in Myanmar citing reasons of human rights.

US major Chevron Corp. and French major TotalEnergies will both withdraw from Myanmar citing worsening human rights conditions, though the national energy company of Thailand will remain for reasons of energy security and to protect the regional power needs and jobs of ordinary people.

Chinese liquefied natural gas imports rose year-on-year by 4.2 percent last month and over 18 percent in the year-to-date period, keeping the nation on track to be the world’s No. 1 LNG importer for 2021.

Woodside, the Australian energy company and LNG plant operator, said that its A-6 Development offshore Myanmar in southeast Asia has now moved from exploration and appraisal to the pre-front-end engineering design phase.

Doris Engineering, the French energy contracts company, and Hyundai Heavy Industries of South Korea have been awarded the front-end engineering and design contract for the phase-three development of a key natural gas project offshore Myanmar in the Bay of Bengal.

Woodside Petroleum, the LNG operator at two plants in Western Australia and with upstream assets in southeast Asia and in the Atlantic Margin, has signed an agreement to invest in Perth-based Blue Ocean Seismic Services to boost exploration and production activities.

“The company is developing an innovative solution that has the potential to make ocean bottom seismic data acquisition cheaper and more accessible,” said Woodside.

The shares agreement was signed with parent company Blue Ocean Monitoring Ltd.

Seismic data is critical for understanding geological formations and the nature of hydrocarbon resources that may be contained within them.

“Current methods use remotely operated vehicles to place nodes on the ocean floor that capture and record soundwaves,” said Woodside whose main E&P activities are offshore Australia, Myanmar and Senegal in West Africa.

The concept was jointly developed by Woodside and Blue Ocean Seismic Services and focuses on using Autonomous Underwater Vehicles (AUVs) in place of remotely operated vehicles.

The AUVs are small submarines that are pre-programmed to self-deploy to the ocean floor and reposition multiple times.

Woodside said this method will improve efficiencies, lower costs and reduce people’s exposure to health and safety risks.

“Subject to satisfaction of conditions precedent, Woodside will take a 35 percent shareholding in Blue Ocean Seismic Services,” said the company, which did not disclose the value of the transaction.

Woodside Executive Vice President for Sustainability Shaun Gregory noted the agreement continued Woodside’s support of Western Australian technology companies.

“The use of AUVs is a priority in our technology strategy, and has global applications. We see ocean bottom monitoring playing an important role in helping us to understand more complex geological settings,” said Gregory.

Simon Illingworth, Blue Ocean Monitoring’s Group Managing Director, said he had enjoyed working with Woodside over the last two years on this technology.

“Woodside is committed to investing in innovative technologies in the oil and gas industry, while striving to continuously improve safety,” added Illingworth.

“We look forward to continuing to develop this promising technology with Woodside’s support,” he stated.

The current technical activities are focusing on small sea trials ahead of the first seismic test in early 2020.