2013-12-10 12:38:53 - Recently published research from Business Monitor International, "Thailand Oil & Gas Report Q1 2014", is now available at Fast Market Research
Thailand remains driven by a strong demand growth for both oil and gas which far outweigh domestic production. With no scope for the country to become self sufficient, it will be critical to develop the necessary import infrastructures and to maximise the country's below ground potential. With several delays already affecting the planned 21st licensing round, we expect oil production to decline over the long-term, and gas production to remain stagnant. Despite an uptake in exploration activities throughout H113-H313, an offshore pipeline oil spill which occurred in late July creates large risks of opposition to offshore exploration by a population already concerned by the risks it creates for the country's tourism industry. The main trends and developments we highlight in
the Thai oil and gas sector are:
* An oil spill in late July from a PTT-owned offshore pipeline near the island of Koh Samet could be a game changer for Thailand. The country has already experienced opposition to further offshore exploration due to the environmental risks it generates for the tourism industry, and we could expect this event to revive such protests in the coming months and further postpone the long-delayed 21st licensing round.
* Liquid hydrocarbons production has been excessively high compared to the country's proved reserves of 450mn barrels (bbl) in 2012; half oil, half condensate. We expect a small increase in production in 2014-2015, when production from the Manora and Nong Yao fields will boost output to around 432,920b/d in 2015. Nonetheless, we keep our position that in view of reserves, current exploration efforts and development projects, we see output slowly falling to 370,210b/d by 2022.
* Refined products consumption rose from 406,510b/d to 781,230b/d between 1990 and 1997, before the Asian crisis triggered a collapse and consumption sunk to 734,260b/d in 1999. Demand has been on a generally upward trend ever since and hit around 1.01mn b/d in 2012. We forecast consumption of 1.14mn b/d in 2017, rising to 1.29mn b/d by 2022. We therefore see oil import volumes rising from about 575,730b/d in 2012, to about 698,000b/d by 2017, and 900,000b/d by 2022.
* UAE based Mubadala Petroleum is due to start production at its Manora field on schedule throughout 2014. This will bring a well-needed additional 15,000b/d of liquid production to the country's falling output.
* This quarter, we have slightly reviewed oil production in Thailand to the upside, following the approval of a FID to development the offshore Nong Yao field in Concession G11/48 in the Gulf of Thailand by Mubadala Petroleum and its co-concessionaire Kris Energy. The field is planned to begin production in the first half of 2015, and will add a production of 10,000b/d at peak rates, a few months after first oil flow.
* We forecast gas production to increase from 36.6bcm in 2012 to 39.96bcm by 2019, and to start falling afterward. Reserves will continue their downward trend to reach 170bcm in 2022, from 300bcm in 2012.
* The Thai government revised its energy mix target to rely more on gas imports at the expense of coal and nuclear. We therefore see gas consumption to continue increasing significantly throughout the decade, from about 48.3bcm in 2012 to nearly 76.87bcm in 2022.
* Liquefied natural gas (LNG) imports have now started arriving in the country after PTT built a regasification terminal at Map Ta Phut. The facility entered service in June 2011 and can handle 5mn tonnes per annum (tpa). PTT is looking at accelerating the expansion of the terminal by one-to-two years to help cope with faster-than-expected growth in gas demand. The company believes it is necessary to add a second 5mn tpa unit earlier than expected because of additional gas demand - largely spurred by new gas-fired power plants, a senior PTT executive said in January 2012. BMI forecasts that LNG import volumes could rise to about 6.5-7.0bcm in 2016.
* From 2017 onward, we expect that gas import infrastructure will be insufficient for the country to meet its domestic consumption requirement. This creates a large downside risk to our consumption forecast
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