LNG

The Asia-Pacific region is expected to have gradually increasing liquefied natural gas demand, driven by the region's economic recovery and new regasification facilities coming online.

The US Department of Energy has published its latest LNG export data showing more cargoes pointed at North Asia instead of mainly European nations after prices moderated after mid-year from 2023 highs.

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.

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. 

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.

JERA Co. Inc. , the Japanese power giant and largest importer of LNG, has sold up its stakes in two companies that operate cogeneration and gas-fired power plants at two industrial estates in the suburbs of the Thai capital Bangkok as it reorganizes its portfolio.

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.

Thailand’s Electricity Generating Public Company (Egco) has applied to the state regulator for a licence to import liquefied natural gas, making it the sixth company to be on the country's list for more LNG supplies.

Egco submitted the application to the Thai Energy Regulatory Commission (ERC) for permission to import 250,000 tonnes per annum to fuel three gas-fired power plants.

The company said the power plants included the 256-megawatt Banpong plant in Ratchaburi, the 121MW Klongluang facility in Pathum Thani and the 120MW co-generation plant in Rayong province.

Egco said the Banpong and Klongluang plants could use additional supplies. They already have an existing sales agreement with Thai state oil and gas company PTT, previously the nation’s sole importer of LNG.

“In the long term, the company may coordinate with other LNG shippers to make purchases through the same contracts when global LNG prices are declining or when demand for gas in Thailand declines,” said Egco.

The four other LNG import licence holders are the state’s Electricity Generating Authority of Thailand (EGAT), Gulf Energy Development, Hin Kong Power and B.Grimm Power.

PTT previously had a monopoly on imports until EGAT was given an LNG import licence in 2019.

The Egco group has a total of 28 power plants in Thailand and in other Asian countries, including Laos, the Philippines, Indonesia and Taiwan.

Its existing plants have total contracted capacity of around 5,475 megawatts, while three others are under construction with total capacity of 331MW.

Egco, which is listed on the Stock Exchange of Thailand, saw its earnings hold up despite the challenges of the Covid-19 pandemic.

The company posted third-quarter net profits of 2.26 billion Thai Baht ($74.9M) compared with 2.82Bln baht ($93.25Bln) in the same three months of 2019, a decline of around 19.5 percent.

Third-quarter revenues amounted to 9.83Bln baht ($325M) versus 10.71Bln baht ($353M) in the prior-year quarter.

The new LNG importers will be accommodated by the expanded capacity at the Map Ta Phut LNG import terminal in Rayong that has been operating since 2011.

PTT has completed several expansions at Map Ta Phut with the most recent from 10.7 MTPA capacity to 11.5 MTPA.

A second regasification terminal adjacent to Map Ta Phut and called Nong Fab LNG is expected to be completed in 2022 with total regasification capacity of 7.5 MTPA. 

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.

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.