Thailand's state-controlled upstream firm PTTEP has bet on increasing gas production at the country's largest and oldest Erawan field as the key to reduce Thailand's reliance on LNG imports.
This comes as international prices of the super-chilled fuel continue to be rocked by volatility.
But casting the spotlight on Erawan could result in the company neglecting to focus on the declining production at other gas fields in Thailand, as well as on similarly vulnerable pipeline gas supplies from Myanmar.
Aside from Erawan, Thailand has a group of smaller gas fields, with Bongkot, Bongkot Tai, Pailin and Arthit among the ones with larger production volumes. The eight other gas fields, namely Tan Tawan, Phu Horm, Sirikit, Lanta, Nam Phong, Jasmin, Yoong Thong and the Malaysia-Thailand Joint Development Area, produce much smaller volumes.
It is noteworthy that gas production from the smaller gas fields has been on a steady decline since January 2023, and has consistently been below 1mn t every month.
Production at Erawan has also been declining over most of 2022-23, but has since ramped up to hit PTTEP's target to achieve 800mn ft³/d (8.2bn m³/yr) of gas production at Erawan by April.
Gas production at the Bongkot gas field has similarly showed a promising jump, from well below 400,000 t/month in March 2023 to at least 500,000 t/month since October 2023.
But overall domestic gas production in Thailand has held mostly steady, in part because of efforts to ramp up production at Erawan. This has effectively offset lower production at smaller gas fields since 2023. Domestic gas production between January-July averaged around 2.14mn t/month, higher from the monthly average of 1.995mn t in 2023 and the monthly average of 2.072mn t in 2022.
Myanmar's largest gas field, the offshore Yadana project, supplies around half of Myanmar's commercial capital Yangon's power needs. The field produces around 6bn m³/yr of gas, of which 70pc is exported to Thailand, where it is sold to state-controlled PTT, and 30pc goes to state-owned Myanmar Oil and Gas (Moge) for domestic use.
But Moge has fallen under military control since a February 2021 military coup. This resulted in the US adding another layer of economic restrictions against Moge, which prohibits US-affiliated companies from providing financial services to the company.
This could make it increasingly difficult for Thailand to purchase pipeline gas from Myanmar in the future as pipeline gas from the country may eventually reduce or even cease. But given that Myanmar pipeline supplies are marginal to begin with, a complete cessation of pipeline gas imports should be easily resolved through importing additional LNG to make up for the shortfall, traders in Thailand said.
LNG imports into Thailand totalled 8.13mn t in 2022, before significantly increasing to 11.32mn t in 2023, according to customs data. Imports into the country so far over January-August stand at 8.2mn t, well on track to potentially surpass 2023 import volumes.
