Thailand's PTTEP says every $3 rise in LNG prices could lift Thai power prices by 5%
BANGKOK, Sept 16 : Every $3 per MMBtu increase in liquefied natural gas prices could raise Thai electricity prices by 5 per cent, the incoming chief executive of Thai energy company PTTEP told the Gastech conference on Wednesday.
"In Thailand, if you do not lower the cost, it will be difficult for us to deliver and sustain the gas," said Kanita Sartwattayu, adding that Thailand relies on LNG for 30 per cent of its power generation.
"In the next 10 years, probably if we cannot do anything better than today, we (will) probably rely 70 per cent on LNG. So what we are trying to do is to maintain the domestic gas (production) as much as possible."
The country relies on a mix of piped gas, domestic gas production and LNG imports for its entire gas consumption.
Besides focusing on cost competitiveness, Thailand also still has a lot of marginal gas fields to develop, she added.
Gas accounts for more than 60 per cent of Thailand's power generation, government data for the six months through June showed.
More than a quarter of the gas used for electricity generation is imported, according to energy think tank IEEFA.
Thailand buys half its LNG on the spot market, Kpler data shows, making it more vulnerable to shocks such as the surge in LNG prices after the U.S. and Israel began the war with Iran six months ago.
Thailand, however, is expected to increase its reliance on LNG imports as domestic gas production declines and pipeline gas imports become more uncertain, said BMI analyst Tanya George.
"Major fields such as Erawan, Bongkot and the Malaysia-Thailand Joint Development Area are maturing and facing reservoir depletion," she said.
"While there is some upside potential from new exploration by PTTEP and Chevron, no major new discoveries have yet been confirmed, so the broader trend still points to declining domestic supply," said George, adding that Thailand's pipeline imports from Myanmar are also set to decline.
