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Bangkok Post
Bangkok Post
Business

Erawan gas output to return to normal

A legal dispute over decommissioning costs when Chevron transferred assets to PTTEP stalled the latter's plans for gas production in the Erawan field, with output falling to one-quarter of its normal volume. (Photo: PTTEP)

PTT Exploration and Production Plc (PTTEP) expects gas production at the Erawan field in the Gulf of Thailand to increase to the normal level of 800 million metric standard cubic feet per day (MMSCFD) by April next year, as part of an effort to increase domestic gas supply and reduce electricity prices.

A drop in gas supply from the Gulf has led the country to import more costly liquefied natural gas (LNG) for use as fuel for electricity generation.

Gas production from Erawan decreased to 200 MMSCFD between 2018 and 2020, a transition period during which PTTEP took over operations from US-based Chevron Corp.

A legal dispute between Chevron and the Department of Mineral Fuels over who would pay for the decommissioning of transferrable assets led to a two-year delay in PTTEP’s plans for the gas block.

Montri Rawanchaikul, president and chief executive of PTTEP, expects gas production to increase to between 400 and 450 MMSCFD by the middle of this year and 600 MMSCFD within 2023.

The volume will gradually increase to 800 MMSCFD by April next year.

Thailand needs to buy more LNG from the spot market at prices that are 3-4 times higher than those of domestic gas.

The amount of imported LNG increased from less than 10% to 20% of total gas requirements during the drop in domestic gas supply.

This has been blamed in part for causing power bills to soar to record-high levels of 4.72 baht per kilowatt-hour (unit) for households and 5.33 baht for businesses, according to the Energy Regulatory Commission.

To reduce dependence on LNG, Mr Montri said PTTEP would also increase gas production from other key sites — the Arthit and Bongkot gas fields and the Malaysia-Thailand Joint Development Area — by 180 MMSCFD.

He said the company had allocated US$29.1 billion for its five-year investment plan between 2023 and 2027. The budget will support petroleum exploration and production and a carbon dioxide capture and storage project.

In 2023, $5.48 billion will be spent to increase oil and gas production in Thailand and Malaysia.

Mr Montri also said the company had set up four new companies in automation and robotics to serve demand for artificial intelligence and robotic services for oil and gas infrastructure maintenance as well as drones for agricultural purposes.

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