The powerhouse of Thailand’s gas production, PTT Exploration and Production (PTTEP) Public Company Limited, is rallying to thwart another potential power crisis in the country. In an effort to substantially amplify its gas production, they are eyeing to magnify the output in Erawan field, the country’s largest gas field. As confirmed by the Chief Executive Officer, Montri Rawanchaikul, their plans are bold and ambition – scaling up production to as much as 800 million cubic feet each day by the dawn of 2024.
Simultaneously, Bongkok, the firm’s second-largest gas field is set for a proposed boost of roughly 10% come 2023. This aggressive growth strategy is a strategic countermove against the disapproval the company faced following a sudden hike in domestic electricity bills last year. The Erawan field had seen a drastic shrink in gas production by an astounding 64% in 2022, causing power producers to resort to sourcing more expensive LNG from global markets. The elevated cost then inadvertently fell on citizens, leading to a larger than anticipated electricity bills. Critics were quick to hold firms like PTTEP culpable for inadequately increasing domestic gas production.
Natural gas is currently the leading power source in Thailand, powering over 60% of the nation’s energy. However, the unexpected pricing spike in the European benchmark, especially the astounding 40% jump, has revived concerns about managing politically sensitive electricity tariffs, given the backdrop of Russia’s Ukraine invasion. CEO, Montri Rawanchaikul, voiced his concerns in a recent interaction, expressing apprehension over a recurring power crisis and acknowledging the problems poised by the fluctuating LNG prices.
“Our foremost goal is to strengthen the reserves and amplify production from local gas fields to cement national energy security,” Rawanchaikul explained. The Prime Minister, Prayut Chan-o-cha, had previously used large subsidies to cap the cost of electricity before the trailblazing May 14 General Election. When Move Forward Party’s captain, Pita Limjaroenrat, surprisingly ascended to power after pledging to cut power bills, it marked a significant turning point for Laos. Yet, the political deadlock has hindered the realisation of his promise.
The proportion of LNG imports used for power generation has shot up from 2018 estimates to become 29% in 2022. The state-owned power utility, Electricity Generating Authority of Thailand, is grappling with the immense financial stress this shift has imposed. It has accrued approximately 135 billion baht (equivalent to US$3.8 billion) debt, according to a report by the Bangkok Post.
This soaring electricity prices is receiving a silver lining of sorts as it’s encouraging renewed interest in government-backed renewable energy initiatives. PTTEP, on the other hand, has been meticulously planning its investment strategies. Montri disclosed that their key interest lies in regions across Southeast Asia, Oman, the United Arab Emirates (UAE), and Algeria after facing challenges in expanding in places like Canada and Australia. Despite the company having nearly US$3 billion in liquid assets, the recent upsurge in oil prices has caused potential targets to shoot up their prices.
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