By an OGJ correspondent
BANGKOK, July 30 -- PTT Exploration & Production PLC (PTTEP) has applied to local authorities for a license to produce gas from the 4,000 sq km Arthit structure off Thailand, one of the major gas discoveries in the Gulf of Thailand.
PTTEP Pres. Chitrapongse Kwangsuksith said the firm sought the production license after being assured of Arthit's commerciality. Twenty of the 21 exploration and appraisal wells drilled on the prospect have yielded gas, and reserves are estimated at 1.5 tcf, Chitrapongse said (OGJ Online, Oct. 12, 2001 and Feb. 5, 2001).
Thailand's incremental demand for natural gas, surfacing earlier than expected because of uncertainties surrounding two controversial coal-fired power projects in southern Thailand, also spurred the decision to put Arthit into production.
Villagers have vigorously protested Union Power Development's 1,400-Mw Bor Nok power project and Gulf Power Generation's 700-Mw power plant in the southern province of Prachuab Khiri Khan. The Thai public's growing concerns about pollution from coal-fired power stations is leading the nation to switch to natural gas-fired power projects to meet its rising electricity demand expected over the next 5 years.
Natural gas already plays a dominant role in the Thai power supply, about 70% of which is generated by indigenous natural gas along with two fields in Myanmar's Gulf of Martaban.
About 77% of Thailand's 2 bcfd of offshore gas is dedicated to the Electricity Generating Authority of Thailand, independent power producers, and small power producers.
PTTEP now sees additional domestic gas demand emerging in 2006, when it plans to put Arthit on stream—likely at the initial rate of 250 MMcfd.
Arthit development
Costs for developing Arthit, which is located about 250 km east of Songkhla, would be $200-300 million for first-phase production. PTTEP has already spent about $60 million on Arthit exploration.
PTTEP, which is primarily state-owned, intends to move Arthit into production itself and is not actively seeking additional partners to share costs. PTTEP owns 80% interest in Arthit, with the remaining 16% owned by Unocal Thailand—a unit of US energy firm Unocal Corp.—and 4% by Moeco Thailand Co, an affiliate of Mitsui Oil Exploration Co. of Japan.
"We don't have the pressure to seek partners, as we have passed the risks at the exploration stage, and we are financially capable of funding the development," said the PTTEP chief executive. He added that the required Arthit investment will be spread over a period of time and will not involve a heavy, up-front payment that could stress PTTEP's fiscal position.
Arthit gas will be piped to the country's central plains through a third trunk line planned in the Gulf of Thailand by the partially privatized PTT PLC, parent of PTTEP.
The proposed trunk line will extend northward, splitting into two spurs to reach Petchaburi on the western side and Rayong on the eastern seaboard.
PTT has announced a capital outlay of 93 billion baht ($2.21 billion) for undertaking the trunk pipeline during 2002-10 (OGJ Online, Sept. 26, 2001).
Maroot Mrigadat, PTTEP senior vice-president, noted that Arthit shares many characteristics with Bongkot, the biggest gas field in thegulf that is producing 550 MMcfd of gas and 13,000 b/d of condensate and crude oil.
The structure and reservoir behavior at Arthit are similar to that of Bongkot. Consequently, the field is likely to be developed in the same manner, Maroot added.
