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Ministry of Energy accepted arbitration on the decommissioning of “the Erawan platform”, risking the gas underproduction in the 2565 plan.
“Sarawut”, Director General of Department of Mineral Fuels, admitted that the Cabinet’s submission to the arbitration proceeding on the decommissioning of the Erawan platform might put the gas production at risk for underproduction from the 2565 plan. PTT ensures by highlighting in finding solutions to manage gas importation to minimize the impact on the general public.
Mr.Sarawut Kaewtathip, Director General of the Department of Mineral Fuels, Ministry of Energy, revealed that “Currently, the Ministry of Energy has reported to the Cabinet to prepare for arbitration after Chevron Thailand Exploration and Production Co., Ltd., which the parent company is Chevron in the United States, has entered into the arbitration proceeding. The case is against the Thai Government on the issue of decommissioning the Erawan petroleum platform at the end of the concession agreement in April 2022, acknowledging that the problem posed a risk of delayed delivery and would affect its target production. “
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“The Government has opened for an auction for a concession of Erawan. The winning bidder who will continue production after the previous concession expiration is PTT Exploration and Production Public Company Limited or PTTEP must enter the site for continuous production. The original target is that the new operator must cooperate with the previous one to enter the site from the mid-2563. However, with this problem, it is accepted that the production of the entire Erawan-Bongkot fields will not meet the target of 1,500 million cubic feet per day beginning in the year 2565. All parties are prepared for the situation and planning to import liquefied natural gas (LNG) to substitute the potential absent amount.” added Sarawut.
Mr. Athapon Rerkpiboon, President and Chief Executive Officer of PTT Plc, said he firmly believes that “PTTEP, as a new operator under the concession system of Erawan field, will be able to enter the area and produce gas continuously. Nevertheless, PTT, as an organization that oversees on national energy security, has planned with the Ministry of Energy to prepare for the circumstance. They are considering additional domestic gas and importation of LNG, in both long-term contracts for 5.2 million tons per year and short-term contracts for the additional. They are ready to supply with the jetty and receiving stations, “Map Ta Phut” and “Nong Fab”, while also managing the gas importation in order to ensure that it has the least impact for pricing on the consumer aspect. Meanwhiles, they use the Gas Pooling system, which put out oil price agreements with the committed price in the past 6-12 months. The system also has long-term contracts, which can reduce the risk in electricity costs in the event that we have to rely on the LNG market. As we can see, the spot price has risen to $ 32 per million BTU while the Gas Pooling price is around $ 7 per million BTU. “
Nonetheless, under the concession system in the original Erawan field, PTTEP has set a goal to enter the site and install eight additional production platforms in mid-2021, and PTTEP will be responsible for the costs of decommissioning the platforms transferred to the state for the portion of functional platforms. While the Ministerial Regulations Prescribing Plans and Estimated Costs and Security for Decommissioning of Installations Used in the Petroleum Industry, B.E. 2559, under the Petroleum Act, requires Chevron to provide collateral to cover all decommissioning costs in both the 142 platforms that transferred to the Government for further operation and the remaining 49 platforms. For the arbitration proceeding, the Thai Government has prepared a budget of approximately 450 million baht.
Source: https://today.line.me/th/v2/article/1zGzKM
https://mgronline.com/business/detail/9640000011252
