PTT Exploration and Production Public Company Limited: Every $3 Increase in LNG May Raise Thailand's Electricity Price by 5%

en.Wedoany.com Reported - On September 16, Kanita Sartwattayu, incoming Chief Executive Officer of PTT Exploration and Production Public Company Limited (PTTEP), said at the Gastech conference in Bangkok that for every $3 per million British thermal units increase in liquefied natural gas prices, Thailand's electricity price may rise by about 5%. Currently, LNG accounts for about 30% of Thailand's power generation energy supply; if the domestic natural gas supply structure does not change significantly over the next decade, LNG's share in Thailand's power generation fuel may rise to about 70%.

Thailand's current natural gas supply consists of domestic gas fields, pipeline imports and LNG imports. In the first seven months of 2026, natural gas accounted for 63.78% of power generation in the Electricity Generating Authority of Thailand system, with power generation of about 84.259 billion kilowatt-hours; coal accounted for 14.97%, and hydropower and other renewable energy combined accounted for 20.30%. Changes in natural gas prices therefore directly enter the fuel costs of Thailand's main power sources.

PTTEP said that one of its current priorities is to maintain Thailand's domestic natural gas production as much as possible and continue developing smaller marginal gas fields. In the first half of 2026, the company's domestic natural gas production remained at about 2.68 billion standard cubic feet per day, higher than the contracted supply volume of about 2.5 billion standard cubic feet per day. Major gas sources include the G1/61, G2/61, Arthit, S1 and Thailand-Malaysia Joint Development Area projects.

Among them, the G1/61 project covers the Erawan, Platong, Satun and Funan gas fields. After taking over from the original operator in 2022, PTTEP continued to add wellhead platforms and production wells. Since March 2024, the project has increased natural gas supply to 800 million standard cubic feet per day, by which time 12 wellhead platforms and supporting subsea pipelines had been installed, and more than 300 production wells had been drilled. The contracted supply capacity of the G2/61 Bongkot project is at least 700 million standard cubic feet per day.

In 2025, PTTEP continued to maintain production at G1/61 and G2/61, while increasing the natural gas capacity of the Arthit project from 280 million standard cubic feet per day to 330 million standard cubic feet per day. The company plans total expenditure of $7.726 billion in 2026, of which $5.164 billion is capital expenditure; capital expenditure used to maintain existing producing assets and Thailand's domestic energy supply is about $3.605 billion.

Thailand's LNG supply also has relatively high spot market exposure, with about half of LNG purchases currently coming from the spot market. More than one quarter of the natural gas used for power generation in Thailand depends on imports. When international LNG prices rise rapidly, spot procurement costs can be transmitted relatively quickly to the fuel costs of gas-fired power generation. PTTEP's estimate is that for every $3 per million British thermal units increase in LNG prices, Thailand's electricity price may rise by about 5%.

PTTEP said that mature gas fields in the Gulf of Thailand such as Erawan and Bongkot are facing gradual resource depletion, and the company will continue to maintain domestic natural gas supply through new wells, wellhead platforms, marginal gas field development and utilization of existing facilities. At the same time, Thailand also relies on pipeline gas from Myanmar and imported LNG to supplement demand; if domestic gas sources continue to decline, future additional natural gas demand will be borne more by LNG.