Uchenna Izundu
International Editor
BARCELONA, Dec. 12 -- Thailand is on track to complete its 5 million tonne/year LNG terminal at Rayong by 2011, according to a senior official from state-owned oil firm PTT Public Co. Ltd.
South Korea's GS Engineering & Construction Corp. will build the terminal 200 km southeast of Bangkok on the Gulf of Thailand. PTT plans to double the terminal's capacity at a later stage as it ramps up LNG purchases from several sources to meet the country's rising gas demand (OGJ Online, Feb. 22, 2008.).
Wuttikorn Stithit, vice-president of PTT's supply department, told OGJ the company signed the contract in February to begin construction of the $700 million terminal and had hoped, when it initially approached the market, that it would be ready in 2010. "But now you have to be more practical."
As demand for LNG has grown over the past 4 years, project developers have seen costs rise steeply due to shortages of materials and labor, resulting in operational delays. Flexibility is key in delivering a successful project because market conditions have changed dramatically and LNG supplies already need to have been negotiated before the terminal is ready.
Stithit said Thailand aims to become a strategic destination for LNG in the Asia Pacific region. "We are in between the Middle East and Far East, with established infrastructure and pipeline system." He stressed that the country has the potential to enhance supply security in the regional market and has less demand seasonality with a large natural gas market.
Qatargas will provide PTT 1 million tonnes/year under a long-term agreement, beginning deliveries in second-quarter 2011. Stithit said that in a scarce supply market, as a new buyer, it was crucial to develop a good relationship with suppliers. He said Thailand has the gas demand to secure the LNG, with current consumption at 3.35 bcfd and demand expected to rise to 6.4 bcfd by 2020. Demand will be driven by power generation, industrial use, and petrochemicals.
Stithit called for LNG buyers to cooperate in the scarce market to share what was available. "Thailand will pay market prices for LNG but it needs to be affordable." Thailand is also seeking supplies from the Middle East, Australia, and Indonesia.
Contact Uchenna Izundu at [email protected].
