PTT gains backing for LNG plans

Corporate July 31, 2018 01:00

By THE NATION

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THE Committee on Energy Policy Administration (CEPA) will soon propose that the National Energy Policy Council (NEPC) unlock PTT Plc's planned gas procurement of about 2.6 million tonnes a year from a gas field in Mozambique, allowing Thailand's largest energy firm to import gas for domestic sales and exports.



Wirat Uanarumit, chief operating officer of the upstream petroleum and gas business group of PTT, said that in the future, PTT will be able to manage markets by itself and gain a chance for domestic sales, sales to non-pool gas customers, and exports to other countries.

In other words, this could lead PTT to reach its target as a liquefied natural gas (LNG) trader, and trade prices will follow a market mechanism, he said.

 “We understand that the Ministry of Energy will allow PTT to buy gas from the Mozambique project and there could be other players to import gas under non-pool gas system. So, we will manage our trading portfolio,” he said, referring to the Mozambique Rovuma Offshore Area 1 Project.

That means PTT will be among the players in the LNG business and the company must muster its management capabilities throughout the LNG value chain. “We will do gas to power. Now, we have done it in Myanmar, having gas to generate power and sell it to customers,” Wirat said.

PTT's subsidiary PTT Exploration and Production Plc (PTTEP) holds an 8.5 per cent stake in the Mozambique offshore project, which is under development and construction to become an LNG plant.

The large field has LNG reserves of about 60-77 trillion cubic feet and the final investment decision (FID) is expected to shift to early next year from the end of this year.

This project is regarded as helping Thailand to gain competitiveness and it carries low costs with logistic advantages, while LNG could be sent to Thailand, Japan, South Korea, as well as countries in Europe and the Americas, Wirat said.

In the next four to five years, the LNG market is expected to become a market of buyers and LNG prices will likely move higher, he said. Therefore, PTT would attempt to have 10-20-year agreements to maintain the selling price.

In the latter half of this year, PTT Group will seek an opportunity to make investment throughout the LNG value chain on expectation to lead PTT to become an LNG hub in this region, where demand for gas continues to rise, Wirat said.

PTT may import gas as a big cargo and have it as small ones for export to Thailand's neighbouring countries, he said.

New explorations 

PTTEP will consider new exploration in Malaysia, the Middle East and Mozambique.

PTT Global LNG Co Ltd, a joint venture of PTT and PTTEP, has been deciding on whether to invest in the LNG value chain in the United States. 

The company will be the operator in Asean and seek partnership in other regions.

PTT forecasts it will import 5 million tonnes of LNG this year, up slightly from a year earlier. The price is expected at US$8 per million BTU.

On another front, PTT has teamed up with Kasikornbank to develop a payment system through an e-wallet for consumers wanting to use digital channels.

Auttapol Rerkpiboon, chief operating officer of the downstream petroleum business group of PTT, said that over 90 per cent of customers have made financial transactions through mobile phones, rather than through branches and other traditional means. “It’s now a trend and PTT has to adjust. E-wallet is a channel for payment and a tool used with other marketing tools,” he said.

PTT will test the e-wallet service soon and expects to link it with its PTT Blue Card or the information system of trade through PTT customer accounts late next year.

The company has 3.5 million PTT Blue Card members with more than 500,000 transactions combined per month. 

The number of card members is targeted to reach 5 million next year.

 

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