PTT's over-budget pipeline could push up electricity prices
Electricity prices might rise again when the third pipeline of the country's largest oil and gas conglomerate PTT Plc begins operations in the middle of the year.
This is contrary to the earlier assumption that prices would fall once more natural gas came on stream. Chitrapongse Kwangsukstith, senior executive vice president of the gas business group, said that PTT's current pipeline rate of transporting gas was quoted at Bt19 per million BTU (British thermal units). However, he said the costs of PTT's new pipeline had been higher than expected and this could cause the rate of its third pipeline to be as high as Bt50-60 per million BTU. "Before the third pipeline opens in June, we will determine the exact rate," he said. The higher pipeline rate will be translated into a higher fuel tariff (FT), which will add up the power base rate and move accordingly with the cost of fuel for power producers. Gas produces 70 per cent of the nation's power. From February to May, the Electricity Regulatory Board has raised the FT by 19.01 satang per unit, which lifted the total FT rate to Bt75.84 per unit. Combined with the power base rate of Bt2.25 per unit, the total unit electricity price is Bt3.01. "If the pipeline rate is revised upwards, this will raise the FT rate for June to September," said Chitrapongse. He added that the current pipeline rate had not changed in 20 years. The government has also regulated natural gas prices; 30 per cent of the gas price moves in line with bunker oil price. Thus, as bunker oil prices move up, so does the gas price and the FT rate. The domestic natural gas price is Bt186 per million BTU, which is lower than in Singapore, the United Kingdom, and the US. "So far, we have already asked concessioned gas producers to reduce natural gas prices by Bt14 billion. The amount was used in subsidising electricity bills," said Chitrapongse. PTT's third gas pipeline is 400 kilometres long and is expected to begin operation in June. It will transport 200 million cubit feet per day of gas from Unocal's concession field, and 300 million cubit feet per day from the Arthit field. Early next year, the pipeline will be linked to B17 and B18 fields in the joint development area south of Thailand.
Watcharapong Thongrung The Nation
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