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NEWS UPDATES 30 July 2010

Thailand to rely more on Burma

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Thailand will buy more gas and electricity from Burma in order to secure supplies as domestic resources become depleted, Energy Minister Wannarat Channukul told the Bangkok Post.

Thailand has been buying gas from Burma since the late 1990s. The Yadana and Yetagun offshore gas fields have an output of 400 and 565 million cubic feet per day (mmscfd) respectively.

In three years Thailand will begin receiving supplies from the new Sawtika Block or M9. PTT Plc, Thailand's sole natural gas seller, will sign a natural gas purchase contract today with Myanmar Oil and Gas Enterprise (MOGE) in Burma's capital city Naypyidaw.

Under the contract, Thailand will receive gas from M9 at a rate of 240 mmscfd, equal to 2.4 billion litres of oil per day, by the end of 2013. Gas from M9 will mainly be used by the transport sector.

The PTT subsidiary PTT Exploration and Production Plc, the production operator of M9, hopes to gain exploration and production rights for Burma's other new petroleum blocks such as M3, M4, M7 and M11.

Mr. Wannarat said that if the two countries could agree on a plan, Burmese natural gas would serve demand in Thailand over the next 10 years as petroleum resources in the Gulf of Thailand gradually dwindle. Domestic reserves will last only another 23 years, he estimated.

Pornchai Rujiprapha, the permanent secretary of the Energy Ministry, said Thailand also hoped to buy more hydroelectric power from Burma's Salween River. There is potential to build two hydropower plants on the river: the 1,200-megawatt Hat Gyi Dam and the 7,000-MW Tasang Dam.

In 2006, Sinohydro signed a memorandum of understanding with Burma for the US$1-billion Hat Gyi dam located along the Thai-Burma border. Negotiations over the shareholding structure of the project's developer are expected to conclude in May next year.

Permsak Shevawattananon, PTT's senior executive vice-president for natural gas business, said PTT had to seek more gas reserves due to a projected rise in Thai demand to 4,821 mmscfd in 2014 and 5,542 mmscfd in 2020 from 3,900 at present.

"Demand for gas is rising not only in power and industrial sectors but also in transport so we need to find more resources overseas," said Mr. Permsak.

In the future if nuclear- and coal-fired power plants cannot start construction due to community fears over environmental issues, then even more reserves would be needed, he added.

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