First LNG from Qatar in 2011

Top executives of the PTT Group, led by president and CEO Prasert Bunsumpun, were in Qatar earlier this week before joining Gastech in Abu Dhabi.

More than 40 gas companies and technical suppliers are attending the major weeklong event, to explore business opportunities in hopes that gas prices will recover despite the economic downturn.

To Energy Minister Wannarat Charnnukul, who accompanied the trip, the planned gas shipments from Qatar will ensure there is no recurrence of the LNG shortage experienced last year.

The National Energy Policy Committee will next month consider the Qatari gas-purchase agreement. If approved, the 20-year contract for the initial supply of 1 million tonnes of LNG per year could be signed in July, and the gas would be shipped to PTT's LNG receiving terminal in Rayong, construction of which is scheduled to be complete in the second quarter of 2011.

The terminal's capacity will be up to 5 million tonnes of gas per year.

The price of the Qatari gas will be based on the Japan Crude Cocktail, a formula indexed to a basket of crude oil imported into Japan.

"This will ensure no shortage, plus it will help turn Thailand into a regional hub for gas trading. Even Singapore does not have a receiving terminal," Wannarat told reporters in Abu Dhabi.

With the terminal, PTT will be able to stock up on gas while global prices are down and sell excess supply when prices go up.

PTT last week announced it would indefinitely delay construction of three natural-gas pipelines, in line with the cut in power demand. About 60 per cent of Thailand's gas consumption is for power generation.

However, PTT does not anticipate the drop in demand to last forever. Despite the absence of the pipelines, there are ways to transport the gas, as permitted by new technologies.

Presented at Gastech was natural-gas hydrate (NGH), which turns gas into a solid substance for easier transportation. Mitsui is also experimenting with an "NGH lorry", which could ship gas to remote areas inaccessible by pipeline.

At Gastech, PTT also showed interest in floating gas vessels, which would allow it to extract gas from small fields without having to invest in expensive platforms.

"We're here to explore business opportunities. At home, we're a big company, but internationally we're small. We need to find partners, and they're not coming to knock at our doors. Unlike international oil companies, we're ready to share with our partners the experiences we've accumulated in the oil, gas and petrochemical industries," said Sriwan Eamrungroj, executive vice president for corporate strategy and planning.

PTT, mainly through its subsidiary PTT Exploration and Production, has so far invested about US$500 million (Bt17.1 billion) in Oman, Iran and Bahrain and is looking towards North Africa and Oceania for further opportunities.

PTT Exploration and Production is preparing a seismic study of two blocks in Egypt, while its joint investment with PetroVietnam in Algeria is expected to produce about 20,000 barrels per day by late 2012.