PTT to widen global reach with LNG trading scheme

PTT Plc, the national oil and gas conglomerate, is preparing a trading business in liquefied natural gas (LNG) despite oversupply in the global market.

Wirat Uanarumit, chief operating officer for upstream petroleum and gas business, said PTT will upgrade its LNG trading business to equal the group’s international oil trade.

The LNG business will shift the company’s focus from the domestic to the global market, he said.

Wholly owned PTT LNG Co was set up by the government in 2004 to develop an LNG receiving terminal and import gas to provide for greater energy security once offshore gas fields in Thailand and Myanmar are depleted.

“PTT is awaiting the green light to kick off this business upon receiving approval from the National Energy Policy Council (NEPC), which is expected next month,” Mr Wirat said.

PTT established a new firm, PTT Global LNG Co (PTTGL), a 50:50 joint venture with subsidiary PTT Exploration and Production Plc (PTTEP).

PTTGL is looking for LNG resources in the US, while the company has also secured 10% ownership in Malaysia’s Petronas LNG 9.

Mr Wirat said demand for gas in the electricity generation sector is slowing because of growing popularity of renewables like solar photovoltaic rooftops and biomass.

Furthermore, the utilisation of PTT’s LNG receiving terminal in Map Ta Phut in Rayong remains low at 40% or only 4 million tonnes a year.

PTT is expanding capacity there to 11.5 million tonnes, with operations expected by 2020.

“The receiving terminal is located in the right place and is coming at the right time to import and trade LNG in the region,” Mr Wirat said.

He said the LNG resources for PTT will come from long-term purchase contracts with Qatar at 2 million tonnes a year, Shell BP at 2 million tonnes and Petronas at 1.2 million tonnes.

PTT also has LNG output from PTTEP, the oil and gas drilling subsidiary, through an 8.5% stake in Mozambique’s offshore Rovuma Area 1.

PTTEP has delayed a final investment decision on the Rovuma project to early next year.

US-based Anadarko Petroleum Corp is the main operator and majority shareholder in the area.

According to the Power Development Plan 2014, Thailand is expected to import 14 million tonnes of LNG in 2021 and up to 20 million tonnes in 2033.

Last year, the country’s energy policymakers deregulated the LNG business by opening up new shippers to register with the Energy Regulatory Commission for the LNG transmission business.

But only the Electricity Generating Authority of Thailand has received a licence, while an application from SET-listed Gulf Energy Development Plc was rejected.