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Despite having a relatively strong domestic oil and gas position, Thailand is increasingly exposed to oil price fluctuations because of its growing reliance on crude oil imports, pipeline gas and now LNG. The country could become a major exporter of refined oil products within the Asian region, but tough decisions must be made with regard to refinery investment if this potential is to be realised.
The main trends and developments we highlight in the Thai Oil and Gas sector are:
- Thailand's energy demand is expected to rise almost 5% in 2012, driven by economic growth and reconstruction work after flooding in 2011, the Energy Policy and Planning Office (EPPO) of the Ministry of Energy said in January 2012. Suthep Liumsirijarern, EPPO's director-general, said energy demand in Thailand in 2012 was forecast to rise about 4.8% to 1.94mn barrels of oil equivalent per day (boe/d), following growth of 4.1% in 2011.
- US major Chevron brought its US$3.1bn Platong-2 gas project in the Gulf of Thailand onstream earlier than expected. Platong-2 will produce about 3.4bn cubic metres (bcm) of gas per year and 18,000 barrels a day (b/d) of natural gas liquids. State controlled explorer PTTEP's investment in domestic gas production, in addition to the rising volumes supplied by Chevron and other partners, points to stable medium-term gas output. This is forecast to plateau at around 40.0bcm in 2012/13. Consumption looks set to reach 61.6bcm in 2016, implying an import requirement of 27.6bcm. By 2021, Thailand could be consuming almost 78.0bcm of gas, importing around 46.0bcm.
- Liquefied natural gas (LNG) imports have now started arriving in the country after PTT built a regasification terminal at Map Ta Phut. The facility entered service in June 2011 and can handle 5mn tonnes per annum (tpa). PTT is looking at expediting the expansion of the terminal by oneto- two years to help cope with faster-than-expected growth in gas demand. The company believes it is necessary to add a second 5mn tpa unit earlier than expected because of additional gas demand – largely spurred by new gas-fired power plants, a senior PTT executive said in January 2012. BMI forecasts that LNG import volumes could rise to 14bcm in 2016.
- Oil consumption rose from 411,000 barrels per day (b/d) to 808,000b/d between 1990 and 1997, before the Asian crisis triggered a collapse and consumption sunk to 701,610b/d in 2001. Demand has been on a generally upward trend ever since and hit an estimated 991,000b/d in 2011. BMI is assuming 2-3% average annual growth to 2016, which suggests consumption of 1.13mn b/d, rising to 1.27mn b/d by 2021. BMI sees oil import volumes rising to 1.05mn b/d by 2021. Assuming an average 2012 OPEC basket oil price of US$111.47/bbl, Thai petroleum import costs are put at US$33.8bn, rising to US$62.2bn by 2021 (when our oil price assumption is US$97.00/bbl).
Click for Report details:Thailand Oil and Gas Report Q3 2012