By the OGJ Online Staff
HOUSTON, Oct. 17 -- Unocal Thailand Ltd. and partners agreed to give PTT PLC an incentive to take incremental gas production from certain Gulf of Thailand fields over a 15-month period.
Unocal Thailand, with partners Mitsui Oil Exploration Co. Ltd. and PTT Exploration and Production Public Co. Ltd., will pay PTT $15 million as an incentive for PTT to buy 18.3 bcf above the contract minimums between July 1, 2001, and Sept. 30, 2002.
The incentive will reduce PTT's cost for these incremental gas volumes by a third to $1.66/Mcf. The incremental gas volumes represent 4-5% of the current production from the Unocal concessions.
Unocal said its long-term gas sales contracts will be maintained to ensure that Thailand has a continued supply of low-cost energy. Earlier, the company said it was reducing capital expenditures due to low gas prices (OGJ Online, Mar. 5, 1201).
Randy Howard, Unocal Thailand president, said, "This incentive is an effective way to assist the Thai consumer in a period of rising energy prices and great uncertainty. At the same time, our long-term contracts maintain an investment climate that enables us to continue the large capital investments required to explore and develop Thailand's oil and gas resources."
The current contract pricing mechanism will continue for all other gas taken under the contracts. The minimum contract quantity for the four gas sales contracts is 905 MMcfd. The weighted average price for production, including the incremental volumes, from Unocal's four contract areas for 2001 is expected to be $2.38/Mcf.