Regional LNG: Thai PTT mulls investing in pipeline, LNG terminal

PTT PCL, Thailand's oil and gas conglomerate, said Tuesday it's considering investing a total of around $3 billion in its fourth natural gas pipeline and a liquefied natural gas terminal project to accommodate increasing demand for natural gas in the future, Dow Jones reported.

Investment in the LNG terminal and facilities would cost around $500 million-$700 million, while investment in the gas pipeline would amount to around $2.42 billion, PTT President Prasert Bunsumpun told reporters.

"We will conclude details on partners and the financing plan of the two projects by next year," said Prasert.

If PTT finds that the projects are feasible, the LNG terminal will be ready in 2010 while the pipeline will commence operations two years later, he said.

Prasert said that the company expects that demand for gas will rise by 7% annually over the next decade, so PTT needs to prepare facilities to meet Thailand's energy needs in the future.

The LNG terminal will have a capacity of around 3 million to 5 million tons per year, equivalent to 400 million-600 million cubic feet per day.

"This amount is around 10% of the (projected) natural gas demand in 2010, which is expected to amount to 5 billion cubic feet per day," Prasert said.

Initially, PTT would hold a 100% stake in the project, and later reduce its stake to 50% by allowing energy or power companies to share the investment.

The investment fund is expected to come from its cashflow and loans, Prasert added.

Separately, Maroot Mrigadat, President of PTT's unit PTT Exploration & Production PCL, told reporters that the company will jointly set up a company with PTT to conduct upstream business in LNG fields abroad to import supplies into Thailand.

Maroot said the company is looking into three potential sources - Iran, Indonesia, and Australia.

"We are discussing with Iran about this matter, but there's no conclusion so far," Maroot said, adding that the LNG price in Iran is quite cheap, but transporting it from there may be expensive.

For Australia and Indonesia, the LNG prices are higher, but the transportation costs will be comparatively lower.

"We have to study the details before making a decision on which country we should go to," said Maroot. (*)