Thailand Considers U.S. Shale Exploration

Brian Hicks

Written By Brian Hicks

Posted January 15, 2013

Thailand’s Minerals Fuels Department has suggested PTT Exploration and Production (PINK: PEXNY) look into exploring U.S. shale reserves in order to secure the possibility for future imports of liquefied natural gas.

The move comes as international attention focuses on the seemingly unending reserves of U.S. shale oil and gas. U.S. shale reserves, some 500 trillion cubic feet, far outpace Thailand’s own estimated 10 trillion cubic feet in the Gulf of Thailand. Interest in U.S. shale could help Thailand’s energy policy in the long run.

According to the U.S. Energy Information Administration, the worldwide price of oil could drop from $112/barrel to $99/barrel in 2014 thanks to the explosive pace of shale development.

Beginning next year, South Korea’s E1 Corp. (KRX: 017940) will buy 180 billion tons of LPG annually from the U.S. Thailand is hoping to do something similar to the tune of about 3 million tons of LNG annually.

Last year’s natural gas production in Thailand was not adequate to meet demand, which rose to 4.8 billion cubic feet per day. At this rate, in 20 years domestic supply could fall to as little as 1 bcfpd.

From Thailand’s The Nation:

“One most likely alternative to boost natural gas supply is to buy more from Myanmar from the present 1.2bcfd. Next year the new supply will be from Myanmar’s M9 field. After that the department will coordinate with PTTEP and the Myanmar government to increase the natural gas that Thailand has purchased from Myanmar to the full transmission capacity of the Thailand-Myanmar pipeline of 2,000 cubic feet per day,” he [Songpop Polachan, director-general of the Mineral Fuels Department] said.

Alternately, bidding could begin for a 21st round of exploration concessions. Without such a development, the nation would need to import about 20 million tons of LNG annually.

PTT is already planning on adding another 5 million tons to its current import levels.

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