Thailand’s PTT Set to Negotiate with Iran

TEHRAN (Fars News Agency)- PTT will soon seek negotiations over contract details to buy liquefied natural gas (LNG) from Iran’s Pars project after the operator reached a construction agreement.

Chitrapong Kwangsukstith, senior executive vice president of PTT’s gas business group, said Pars’ operator was finalizing details of an LNG purchase contract with China and Thailand would be the next in line for a similar deal.

PTT earlier signed a preliminary agreement to import three million tons of LNG per year from the Pars site – a joint venture between National Iranian Oil, TotalFinaElf, and Petronas – from 2011, but a deferral in the site’s construction will cause a six-month delay.

“Pars will initially export two million tons of LNG to PTT,” Chitrapong said.

Domestic demand for natural gas will surge from 3.28 billion cubic feet per day at the moment to 5 billion in the next five years, thanks to new natural gas-fired power plants and government encouragement to use gas instead of fossil fuels.

“Demand for natural gas in Thailand stands at 3.28 billion cubic feet a day. This substitutes bunker-oil imports of over Bt300 billion a year. Power plants account for 72 per cent of demand for natural gas, industry for 10 per cent, transportation for 1 per cent and gas separation plants for the remainder,” PTT president Prasert Bunsumpun said.

Thailand imports 60 per cent of its domestic energy at a cost of Bt1 trillion, representing over 10 per cent of the country’s gross domestic product.

Prasert said another one billion cubic feet per day of natural gas would be supplied from the Malaysia-Thai Joint Development Area A-18 block at the Arthit gas field from 2008 to 2012.

“In the Energy Ministry’s pipeline, there are 2,500-megawatt coal-fired plants and 4,000-MW nuclear plants that will feed power into the grid from 2011, but we are not sure if the plan is viable due to public protests,” Prasert added.

“Besides, domestic natural-gas supply is not sufficient. It is very costly to install a pipeline from the Middle East to Thailand and hydro and wind power plants are limited, so LNG imports are important.

“The government has a policy to promote the use of natural gas to replace petroleum as it is a clean fuel and we have our own sources. In future, the ratio of natural gas will be raised to 45 per cent and petroleum will be reduced to 36 per cent.”