Erawan gas field output can help curb electricity costs, PTT says
PTT Plc s confident that by April 1, G1/61, aka the Erawan field, its natural gas production source in the Gulf of Thailand, will be fully operational and producing 800 million cubic feet per day as defined in its contract.
This will support electricity prices for May to August and should keep costs below 4.20 baht per unit.
Montri Rawanchaikul, CEO of PTT Exploration and Production (PTTEP), said the company is accelerating plans to increase natural gas production in the G1/61. Following prolonged delays in entering the area, PTTEP’s subsidiary, PTTEP Energy Development Co Ltd (PTTEP ED), has expedited the installation of production wells, resulting in an increase in gas production from the field by over 400 million cubic feet per day. The production capacity will be increased to 800 million cubic feet per day by April in line with the contract, he added.
PTTEP does not therefore need to pay shortfall charges arising from delays in entering the area. The Energy Ministry's Department of Mineral Fuels is aware of the situation, and PTTEP aims to gradually increase production from around 200 million cubic feet per day, currently at 400 million cubic feet per day, to the contracted 800 million cubic feet per day by April 1.
Warakorn Prohmobol, director-general of the Department of Mineral Fuels, confirmed that PTTEP is in the process of installing production wells to achieve the contracted production level of 800 million cubic feet per day. It is essential to maintain this production level in the long term, in line with the 10-year contract, he added.
According to the Energy Regulatory Commission, if PTTEP cannot achieve the contracted 800 million cubic feet per day from the Erawan field by December of this year, it can import liquefied natural gas (LNG) at the same price as that from the Erawan field to avoid a fine. The Energy Regulatory Commission estimates that electricity prices for May to August of this year will be around 4.20 baht per unit if the production quantities are as per the contract.
The new electricity rates will depend on various factors, including the return of the power purchase adjustment (Ft) burden to the Electricity Generating Authority of Thailand (EGAT), which currently stands at about 100 billion baht. Additionally, factors such as LNG spot prices and their trends will also play a role in determining the new electricity rates.
