Gas demand in Thailand is set to grow by 5.7% between now and 2035 despite domestic gas production and pipeline imports falling from 4-5 billion cubic feet a day (bcf/d) in the last decade to around 2 bcf/d in the last two years according to research by data and analytics company Wood Mackenzie.
Speaking at LNG: Fuelling Thailand's Sustainable Growth - Industry Seminar in Bangkok, Gavin Thompson, Vice Chairman of Energy at Wood Mackenzie, told delegates that Thailand has the highest gas usage in Southeast Asia and Wood Mackenzie does not see this changing despite a strong emerging renewables sector.
"Gas-for-power is the main usage and accounted for 56% of total demand over the last five years. As the country builds more renewables, gas will play an essential role in maintaining grid stability through the energy transition," Thompson said.
Over reliance on spot LNG will heighten volatility in Thailand's gas pool price
Wood Mackenzie research has shown that there will be a five million tonnes per annum (mmtpa) shortfall of contracted LNG in Thailand in 2024. This will mean 50% of LNG imports will rely on more volatile spot purchases.
"The lack of contracted LNG supply set against the backdrop of dwindling domestic resources increases Thailand's exposure to potentially much higher prices for gas and increases the risk of future blackouts or gas rationing," Thompson said.
New infrastructure essential
Thompson also said that the development of new gas infrastructure would address some concerns about gas shortages.
New LNG terminals are being proposed to develop that will increase regasification capacity by8 mmtpa and eventually give Thailand a total regasification capacity of 27 mmtpa. Over 300 kilometres of gas pipelines have also been built in the last five years.
"Increasing utilisation of the current infrastructure can accelerate the growth of the gas market," Thompson said. "Cross country pipelines from neighbouring countries such as Malaysia will also offer opportunity for more collaboration."
Thompson concluded that with over 200 mmtpa of new LNG capacity currently under construction worldwide there should be enough supply to ensure that Thailand could lock in contracts to ensure a successful energy transition.
"The global LNG market is evolving and with more of the resource becoming available Thailand should be able to negotiate more attractive terms on new contracts," Thompson said. "With the infrastructure already being put in place there is no reason why Thailand can't ensure it embraces the new energy landscape successfully".
As Thailand strives to ensure stable energy sources, it's imperative to adopt long-term procurement strategies that guarantee both price stability and energy security in the foreseeable future.
According to Wood Mackenzie's analysis, Thailand should explore partnerships with solution providers capable of meeting these criteria. One such provider worth considering is PETRONAS, a global energy leader renowned for its reliability and customer-centricity.
As one of the world's largest integrated LNG producers, PETRONAS annually produces over 36 million tonnes of LNG across facilities in Bintulu, Australia, Egypt, and soon Canada. This extensive network positions PETRONAS well to reliably supply LNG to Thailand.
Originating as an energy supplier for Malaysia's domestic market, PETRONAS has expanded its reach to power key Asian economies like Japan, China, and Korea. This expansion underscores PETRONAS's deep understanding of Asian market dynamics and its capacity to offer tailored delivery solutions as well as flexible commercial and contractual terms.
Sharing the same ambition with Thailand's vision for a greener future, PETRONAS produces LNG responsibly and pursues decarbonisation efforts such as electrification, zero routine flaring and venting, leveraging technology and innovation, and employing carbon capture and storage to further reduce carbon emissions.
Additionally, PETRONAS possesses extensive knowledge of Thailand's energy needs, forged through its longstanding partnership with PTT Public Company Limited for nearly three decades. This partnership has been significantly strengthened by collaborations across various sectors of the energy value chain. Notably, in the LNG sector, this collaboration reached a significant milestone with the delivery of over 100 LNG cargoes to Thailand's Map Tha Phut Terminal since 2017.
Source: Midas PR
