PTT restarting LNG trade in sandbox
National oil and gas conglomerate PTT is preparing to resume its trial for liquefied natural gas (LNG) trading after the project was paused in the third quarter last year during the lockdown period.
A Thai law prohibits gas exports, so the company is required to conduct a test on plans to import LNG for re-export.
The trial is being done in a sandbox set up and overseen by the Energy Regulatory Commission since last year under the government's plan to make Thailand a regional LNG trade hub.
"Not only did the lockdown halt project development, but the delay also came about from decreasing demand for LNG in the third quarter last year," said Wuttikorn Stithit, PTT's senior executive vice-president for gas business.
PTT expects its first LNG trade route will be from Rayong's Map Ta Phut to southern China.
The firm's LNG receiving terminal, located in Map Ta Phut, has storage capacity of 11.5 million tonnes a year. Present utilisation is half of capacity. PTT is also building another storage facility with capacity of 7.5 million tonnes, scheduled to be completed in 2022.
Mr Wuttikorn said PTT is closely monitoring LNG prices in the spot market after they dropped to US$25 from $30 per tonne last week.
Over past 12 months there have been large fluctuations in LNG prices, which have soared from less than $3 per tonne in May last year to $30 a week ago.
Mr Wuttikorn said the unusually cold weather since November last year increased demand for LNG in East Asia, which needed gas to run heaters.
Earlier, before the ongoing outbreak, PTT estimated demand for LNG in Thailand would grow 3-4% this year from daily average consumption of 4,700 million standard cubic feet per day in 2020.
Last year, demand fell by 8% from 2019 due mainly to the three-month lockdown period.
"New estimates for gas demand will be carried out soon, but the calculation is quite difficult because price fluctuations remain high," said Mr Wuttikorn.
PTT believes gas users in the Thai market will not receive negative impact from the fluctuations because over 70% of gas supply -- from both domestic sources and imported -- are based on long-term purchase contracts.
Most gas users are private and state-run power plants, operators in the industrial sector and road transport operators.