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.

Cheniere Energy, the largest US liquefied natural gas exporter with its two plants at Corpus Christi in Texas and Sabine Pass in Louisiana, said that it had signed long-term contracts for 180 million tonnes of LNG and issued an upbeat message on markets, expansions and delivery.

The Sultanate of Oman on the Arabian Peninsula said it signed up a Chinese liquefied natural gas buyer as its eighth new customer from the renewed production concession at Oman LNG.

Oman LNG has signed a binding term-sheet agreement with the China International and Chemical Company (Unipec) to supply 1 million tonnes per annum of LNG starting in 2025.

Unipec is the trading arm of major Chinese energy company China Petrochemical Corp., also known as Sinopec.

The Unipec agreement is similar to seven others it has signed since the turn of the year with customers in Europe and Asia, though the Chinese deal is just for four years while the others are for up to 10 years.

“Unipec has become the latest beneficiary of Omani LNG and marks the first LNG term deal with a Chinese firm and opens the doors for new opportunities in the Chinese market,” said a statement.

The agreement was signed in the capital Muscat between Hamed Al-Naamany, Chief Executive of Oman LNG, and Wang Yahang, General Manager of Unipec, in the presence of Salim Al-Aufi, Oman’s Minister of Energy and Minerals.

“The term-sheet signing with Unipec marks another milestone, where the Omani LNG will be creating new opportunities in China. Such an agreement will further enhance our position in the global energy industry and ensure we maintain our reputation as a reliable energy supplier worldwide,” said Al-Naamany.

Previous deals

The previous Omani LNG deal was signed at the end of January 2023 with Turkey’s state-owned Petroleum Pipeline Corp. (BOTAS) .

Oman will supply BOTAS with 1 MTPA of LNG for a 10-year period starting in 2025.

Similar deals to the BOTAS agreement have been signed with France’s TotalEnergies, Thailand’s oil and gas firm PTT, three Japanese buyers, JERA Co. Inc., Mitsui & Co. and Itochu Corp., and UK major Shell.

The new Oman LNG contracts are being lined up as the company plans to extend the lifespan of the liquefaction complex at Qalhat for another 10 years beyond its current concession to 2024.

The Omani LNG export facilities comprise the amalgamated three liquefaction Trains of Oman LNG and Qalhat LNG, which were merged in 2013 under the banner of Oman LNG.

The company has three liquefaction Trains at its site near Sur in the South Sharqiyah Governorate with a combined nameplate capacity of almost 11 MTPA.

The two-Train original Oman LNG plant has 7.1MT of capacity and the one-Train Qalhat plant has 3.6MT of capacity, though actual capacity is more after de-bottlenecking upgrades.

Oman had previous cut LNG output but the Ghazeer and Khazzan natural gas discoveries have in the last few years underpinned LNG production.

The gas has also opened the way for a proposed small-scale LNG plant to service the LNG bunkering market at the Port of Sohar.

That project envisages annual production capacity of 1 MTPA in Sohar, one of the largest industrial zones in the Middle East and well located for ships passing through the Gulf of Oman.

Thailand’s new Nong Fab LNG regasification terminal in Rayong province, the nation’s second import facility, has received first volumes of LNG for commissioning and is on track for full commercial start-up in 2022.

PTT Group, the national energy company of Thailand, is behind the Nong Fab project.

PTT is expanding regasification capacity and LNG imports after completing several expansions at the single existing Thai import terminal at Map Ta Phut, which can now handle 11.5 million tonnes per annum.

The Nong Fab terminal is adjacent to the Map Ta Phut industrial area in Rayong and will have total regasification capacity of 7.5 MTPA.

Thailand has opted for the more permanent onshore LNG terminals rather that a floating storage and regasification unit (FSRU), seen mainly as a fast-track energy solution.

The new terminal is currently being completed by Italian energy engineering firm, Saipem, and Taiwan-based CTCI Corp.

Saipem and CTCI were awarded the engineering, procurement and construction contract for the facility four years ago and with an estimated cost of around $900 million.

Experienced

It was Milan-based Saipem who announced the first volumes of LNG being introduced into the Nong Fab facility. The company is one of the world's most experienced LNG engineering firms with expertise in subsea, liquefaction and regasification projects.

“Saipem is pleased to inform that on 18 June the Nong Fab LNG regasification terminal, located in the Mueang Rayong district in Thailand and executed by Saipem in a joint venture with its partner CTCI, began offloading the first LNG from a carrier moored at the terminal jetty,” said the Saipem statement.

Saipem added that the scope of the work for the project, which began in July 2018, included two 250,000 cubic metres capacity LNG storage tanks, the regasification and pipeline eqipment and a six-kilometre trestle unloading facility as well as an administrative building.

“It is a particularly significant project which is marked by its tank capacity (the largest ever executed in Thailand) and by the world’s largest trestle in the LNG sector,” explained Saipem.

“The offloading of the first LNG was achieved thanks to the expertise, quality and efforts of Saipem’s team in Thailand as well as the strong support of the client, PTT LNG,” the company added.

Saipem stated that full commissioning and start-up were expected before year-end and would provide the country with a stable and reliable energy supply in response to increasing power demand in Thailand.

“The project, confirms Saipem’s role in the LNG and regasification sectors, thanks to its long-standing expertise in complex projects, which are always executed applying the highest safety standards,” Saipem declared.

PTT Group, the national energy company of Thailand, has started a joint venture with Tokyo Gas to help with fuel switching in the southeast Asian nation, including small-scale truck deliveries of liquefied natural gas.

Sasol, the South African petrochemicals, energy and fuels company, has agreed to sell a 30 percent in the natural gas pipeline running from future LNG exporter Mozambique into South Africa.

Sasol will retain a 20 percent holding and continue to operate and maintain the 865-kilometres Republic of Mozambique Pipeline Company (ROMCO) link currently transporting natural gas from the Pande and Temane fields in Mozambique to Sasol's operations in South Africa.

Both the Pande and Temane gas fields are onshore and are located around 600 kilometres north of the Mozambican capital Maputo and have been in production since 2004 and 2010 respectively.

However, Mozambique has other more lucrative natural gas fields in the Rovuma Basin offshore the northeast province of Cabo Delgado, though the main onshore LNG export project being developed there by France’s Total has been suspended for now because of insecurity in the region.

Sasol, the world’s leading producer of motor fuel made from coal, is attempting to cash in assets to pay off some of its huge debts.

Sasol said the sale would net around 5.14 billion South African rand ($363M) when completed by the end of the first half of 2021.

The purchasers are South African interests, including a subsidiary of the nation’s largest pension fund firm and insurer, Old Mutual.

“Sasol will retain a 20 percent shareholding in ROMPCO and will continue to operate and maintain the pipeline in terms of the commercial agreement between Sasol and ROMPCO, which is independent of the proposed transaction,” explained the South African energy company.

“Sasol´s agreements with ROMPCO to transport gas to the Secunda plant are unaffected by the proposed transaction and the tariffs remain as per the said agreements, which were approved by the National Energy Regulator of South Africa (NERSA),” it added.

Secunda CTL is a synthetic fuel plant and petrochemicals and power complex owned by Sasol at Secunda in Mpumalanga province, about 130 kilometres (80 miles) southeast of Johannesburg.

The plant uses coal liquefaction to produce petroleum-like synthetic crude oil from coal.

The Sasol name itself comes from the acronym for South African Synthetic Oil.

The CTL project had its roots in the Apartheid era in South Africa as one way of firstly partly circumventing the global oil supply crisis of the 1970s and then international sanctions.

The first synthetic oil plant in South Africa was opened about 50 years ago at Sasolburg, an industrial site in the north of Free State province chosen for its adjacent coalfields and abundant water supplies from the Vaal River.

Thailand’s oldest industrial conglomerate, the B. Grimm Group, is applying for a second LNG import licence to increase volumes received for its power projects at a time of competitive LNG supplies and prices.

Gulf Energy Development, a leading Thai power supplier to the Electricity Generating Authority of Thailand (EGAT) and private customers in the country’s main industrial zones, has been awarded government licences along with a partner company to import 1.7 million tonnes per annum of LNG.

The state-owned Electricity Generating Authority of Thailand said that Petronas LNG, a subsidiary of Malaysia’s state oil and gas company Petronas, won a tender to supply the Thai utility with LNG and may become a long-term supplier.