SET-listed PTT Plc, the national oil and gas conglomerate, will delay purchasing additional liquefied natural gas (LNG) this year because of low growth in demand for gas in Thailand.
PTT has witnessed an influx of independent power supply over the past five years as dozens of business communities turn to self-generating power.
"They can produce electricity themselves, which is impacting future demand for natural gas," said president and chief executive Chansin Treenuchagron.
Earlier, PTT planned to purchase a further 2.6 million tonnes of LNG from Mozambique's Rovuma Offshore Area 1, additional volume on top of a long-term purchase agreement of 5 million tonnes per year.
Mr Chansin said it's too early to make a decision to put off the LNG purchase because the latest national power development plan (PDP) 2018-37 has just begun being implemented.
The PDP envisions power generation from natural gas representing 53% of total generation.
Demand for gas has stood in the range of 4,600-4,700 million standard cubic feet per day for many years.
"If PTT purchases massive volumes of LNG without ascertaining demand, there is a risk of changes in purchasing conditions and losses, so PTT has to wait to see any possible new gas demand in coming years before making a final decision," Mr Chansin said. "Based on the PDP, there are some possibilities that gas demand can increase in the future, based on power generation from natural gas."
But PTT will purchase LNG in the short term to guard against possible gas interruption and declining production from the Yetakun and Yadana gas fields in Myanmar.
Yesterday PTT and its group of companies announced capital spending earmarked for this year at 264.23 billion baht for 11 projects focused on the flagship Eastern Economic Corridor scheme.
Five projects are set to be run by PTT to secure the country's gas supply.
The remaining six projects will be carried out by three SET-listed subsidiaries: Thai Oil Plc, PTT Global Chemical Plc (PTTGC) and IRPC Plc.
PTT will allocate a five-year investment budget of 167 billion baht for gas facility logistics. This budget excludes another 187.6 billion baht in the provisional budget for asset purchases and takeovers.
PTTGC will also delay the development of a petrochemical complex in the US due to development cost uncertainties.
PTTGC president and chief executive Supattanapong Punmeechaow said the consortium for the US project is revising the plan to trim development cost, which is higher than previously estimated.
The project costs US$5.7 billion baht (179 billion baht), and PTTGC has teamed up with South Korea-based Daelim Industries for a total output of 1 million tonnes a year.
The project site is in Mead Township, Ohio.
"We are hoping to mitigate costs within the next four months," Mr Supattanapong said. "We will make a final investment decision for this project within this year."