Gas production hikes and regional buying to cut LNG imports
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Gas production hikes and regional buying to cut LNG imports

The Arthit gas block in the Gulf of Thailand, operated by PTT Exploration and Production. Gas production at this facility is set to increase.
The Arthit gas block in the Gulf of Thailand, operated by PTT Exploration and Production. Gas production at this facility is set to increase.

Thailand plans to increase domestic gas production and renew gas purchases from neighbouring countries to reduce its dependence on liquefied natural gas (LNG) as gas demand is expected to increase in Asia, say energy authorities and analysts.

Officials in the power sector do not want to import more LNG because of price fluctuations in the spot market, which could eventually increase the price of electricity bills.

Under the 2024 national gas plan, which recently went through a public hearing process, gas production at the Pailin and Arthit gas fields in the Gulf of Thailand will increase, while authorities will continue to purchase natural gas from Myanmar and the Malaysia-Thailand Joint Development Area, said Wachara Phajee, head of the natural gas unit under the Energy Policy and Planning Office (Eppo).

Covering from 2024 to 2037, the national gas plan is part of the national energy plan, the country's blueprint for energy management that includes an alternative energy development plan, a power development plan, an energy efficiency plan and an oil plan.

The national energy plan is slated to be sent to the National Energy Policy Council for approval this year.

Gas demand in Thailand is expected to rise by 1.7% to 4,945 million standard cubic feet per day (MMSCFD) by 2030, up from an estimate of 4,859 MMSCFD for 2024, said Mr Wachara.

Without plans to increase domestic gas production or purchase natural gas from neighbouring countries, Thailand would need to import more LNG.

Roughly 62% of the nation's gas supply serves the power generation sector, with 18% used by gas separation businesses, 17% required by the industrial sector and the remaining 3% needed by the transport sector.

Asian countries are expected to use more gas, particularly LNG, as a key fuel as well as to support their economies.

Shell Plc, a British multinational oil and gas company headquartered in London, expects LNG demand to surge by more than 50% by 2040, driven by industries switching from coal to LNG in Asia and economic growth leading to higher energy consumption.

LNG trade in the global market reached 404 million tonnes in 2023, up from 397 million tonnes in 2022, though supply was tight, according to Shell.

LNG often complements renewable energy sources, such as wind and solar, because they offer intermittent supply based on weather patterns.

Having LNG as an energy production supplement helps maintain short-term flexibility and long-term stability of supply, he said.

In Thailand, an uptick in LNG imports after the escalation of the Russia-Ukraine conflict in 2022 led to a surge in the price of electricity bills.

This caused the country to carefully determine appropriate proportions of gas, renewable energy and other fuels within the gas and power development plans, said Mr Wachara.

"Energy officials drafting the two plans do not want to see the power tariff set another record high, leading to consideration of the types of fuels, their prices and the need to reduce greenhouse gases," said Sarat Prakobchat, deputy director-general of Eppo.

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