Energy Ministry seeks to lower electricity production cost
The Energy Ministry's Department of Mineral Fuels is expediting its efforts to manage natural gas sources to reduce the production cost of electricity.
The department says it is coordinating with all relevant parties to accelerate progress on the Thai-Cambodian joint development area in line with government policy.
According to Supalak Parn-anurak, the department’s deputy director, it is coordinating with all parties to increase natural gas production from the Erawan gas field, formerly known as G1/61. It is expected that by December 1 of this year, daily production will increase to 600 million cubic feet, up from the current 400 million cubic feet. However, the operator, PTT Exploration and Production Plc (PTTEP), recently indicated it is facing challenges in meeting these production targets.
The delay in production is partly due to issues with the crane of the K1 vessel used for installing the production platform. A new vessel is being procured, causing a delay of at least two months. Nonetheless, the company is confident that it will increase gas production as per the contract, reaching 800 million cubic feet per day by April 1, 2024.
To address these challenges, the Department of Mineral Fuels has been working closely with all stakeholders to expedite solutions. PTT has increased natural gas production at the G2/61 or Bongkot field by an additional 130 million cubic feet per day, maintaining its contracted production of 700 million cubic feet per day without any reduction. Additionally, it has increased production from the Arthit gas field by an extra 60 million cubic feet per day.
It is also coordinating with Yadana in Myanmar to ensure the production capacity of 350 million cubic feet per day is maintained for an extended period. Discussions have been held with Malaysia to use natural gas from joint development areas in Thailand if Malaysia does not require it.
The management of natural gas sources and pipelines is seen as an alternative to importing liquefied natural gas (LNG), which would help avoid higher costs of electricity production.
Regarding the Thai-Cambodian overlapping area, the Department is ready to collaborate with the Ministry of Foreign Affairs to proceed with the necessary legislative framework. It is estimated that, if successful, it will take at least 10 years to start natural gas production. This would benefit both countries by creating value from petroleum resources and reducing the cost of living for the people of Thailand.
Natural gas reserves in the Gulf of Thailand have decreased in recent years, with Thailand now producing only 50% of its requirements, down from 70% in the past. This reliance on higher-priced LNG imports has led to increased electricity production costs in Thailand.
