Thailand Aims to Shave Gas Consumption as Economic Growth Continues

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--Although Thailand's Energy Ministry has a newly revised power plan that includes reducing the role of natural gas in the country's energy production, the absolute demand for gas will continue to rise. The target is to bring gas use down to less than 50% of the national energy mix and source the balance from imported electricity, imported coal and renewable energy.

Currently, natural gas represents 72% of the total power mix in the country. Coal sources 20%, domestic hydropower 5% and power imported from neighboring Laos 2%.

Thailand's own natural gas production is forecast to peak in 2015, followed by a decline in production, if no new gas fields are discovered. The current volume of gas carried by the national pipeline grid is 3.2 billion cubic feet per day (bcfd), which will increase to 3.9 bcfd in 2013. By 2016, gas demand could increase to 5.2 bcfd and about 7 bcfd by 2035, from the current demand of 4.3 bcfd.

"We need more gas--not only from local sources, but also from imports of both gas and liquefied natural gas (LNG)," Energy Permanent Secretary Norkhun Sitthipong said. The department is scheduled to offer exploration and production licenses in July, with a total of 22 petroleum fields, both onshore and offshore, on auction.

The cost of imported LNG could put upward pressure on Thailand's cost of power generation in the face of limited exploration and resistance to coal-fired plant construction.

Depending on the outcome of the current international financial storm, Thailand's industrial prospects are looking good, which puts further pressure on power generation and fuel feeds. The Thai Industries Sentiment Index (TISI) rose for the sixth consecutive month to 106 points in May, from 104 in April, and has been above 100 points for four consecutive months, indicating growth in the economy. The May TISI involved 1,110 manufacturers in 42 industry groups.

Rising costs, labor shortages, political issues and euro-zone problems are causes for concern, but the chairman of the Federation of Thai Industries (FTI), Payungsak Chartsutthipol, is confident that exports in 2012 could grow 15%. In a worst-case scenario, the euro crisis could cut $5 billion of exports.

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