Marubeni & Itochu win Thailand Gas contract

Two Japanese firms, Marubeni and Itochu, have won a US$2.8 billion contract to build a 430-km gas pipeline in Thailand, state oil and gas monopoly PTT has said.

The new pipeline will run from the Gulf of Thailand coast at Rayong to Nonthaburi Province north of Bangkok, PTT’s chief operating officer, Chavalit Punthong, said in a statement to media.

Rayong is the receiving port for Thailand’s LNG imports and is located adjacent to the country’s only regasification plant, which is currently being expanded.

Despite Thailand’s dependence on natural gas as its main energy source, pipeline infrastructure in the country is still underdeveloped. PTT operates four other pipelines.

PTT did not specify when work would start on the new pipeline but said that it would be completed by 2020.

The regasification facility at Map ta Phut is being expanded to a capacity of 10 million tonnes per year by the end of 2017, PTT said.

PTT recently signed long-term supply agreements with BP, Royal Dutch Shell and Qatargas.

Thailand still depends on gas for 70% of its electricity generation but domestic reserves in Gulf of Thailand fields are declining.

The main import sources until now have been the Yetagun and Yadana offshore fields in Myanmar’s Andaman Sea, but these are also in decline.

The Thai government called last year for a reduction in the country’s dependence on gas. However, long delays in approvals for two large planned coal-fuelled power plants owing to public opposition have led to higher demand for gas, the Bangkok Post reported.

The Electricity Generating Authority of Thailand (EGAT) commissioned a feasibility study in July 2016 for the construction of an LNG receiving terminal on Thailand’s west coast. The study was due to be completed by the end of 2016.

PTT is negotiating with Petronas – neighbouring Malaysia’s national oil company (NOC) – to become Thailand’s fourth LNG supplier. Proposals for a 15-year supply contract are still being assessed by the Thai government’s Energy Policy Committee