PTT Exploration and Production Plc (PTTEP) is allocating a 230-billion-baht budget this year to support plans to increase gas production at the Erawan gas block and maintain a high level of production at two other gas fields in the Gulf of Thailand.
More domestic gas supply is crucial to contain the power tariff which increased a result of more imports of costly liquified natural gas (LNG) to fuel electricity generation in the country.
With the new investment, PTTEP expects its petroleum sales to grow by 9% to 505,000 barrels of oil equivalent per day (BOED) this year, up from 468,000 BOED last year, said Montri Rawanchaikul, chief executive and president of PTTEP.
In 2024, the average oil and gas prices are estimated to stand at US$45 per barrel of oil equivalent (BOE), down from $48.2 per BOE, he said.
The company aims to increase gas production at Erawan to 450 million standard cubic feet per day (MMSCFD) within this month, up from 400 MMSCFD at present. The volume will increase to 800 MMSCFD in April.
Mr Montri said PTTEP requires $900 million to double gas production at Erawan to 800 MMSCFD and keep the capacity at this level for 10 years.
The drop in gas supply at Erawan during 2019 and 2023 caused Thailand to import more LNG. The LNG prices fluctuated once the war between Russia and Ukraine broke out in 2022.
According to Mr Montri, PTTEP will also spend part of the 230-billion-baht budget on supporting a plan to maintain off-shore gas production at the Arthit and Bongkot gas blocks.
Arthit and Bongkot currently produce 340 and 750 MMSCFD, respectively. The volume is higher than the requirement of 280 and 700 MMSCFD stated in contracts made with its buyer, PTT Plc.
Having a high level of production at Arthit and Bongkot is aimed at reducing the country's dependence on LNG imports.
Another gas field in the Gulf is Pailin which is operated by Chevron Corp. The US-based firm currently produces 400 MMSCFD, but its production licence is scheduled to end in 2028.
Concern is growing that this gas block may encounter a similar problem to that faced by Erawan during a transition period if the gas exploration and production licence changes hands.
PTTEP is planning to start drilling wells at two new gas blocks in the Gulf -- G1/65 and G1/65 -- for a seismic test within 2025.