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Immediate Need for Swift Discussions with Cambodia

Immediate Need for Swift Discussions with Cambodia

The Petroleum Institute of Thailand (PTIT) has recommended that the government establish a Thai-Cambodian joint technical committee to expedite discussions on collaborative petroleum production in the overlapping claims area (OCA) between the two nations. This initiative comes as gas production from existing blocks in the Gulf of Thailand continues to decline.

The reduction in domestic gas supply necessitates Thailand to import more expensive liquefied natural gas (LNG) to support its power generation needs. Given that negotiations and subsequent gas exploration and production processes are time-consuming, Kurujit Nakornthap, director of PTIT, emphasized the importance of initiating the process immediately.

“It will likely take at least eight years before natural gas from the OCA can be utilized,” said Mr. Kurujit, a former energy permanent secretary.

According to a source at Government House, who wished to remain anonymous, there have been no proposals for further discussions since Cambodian Prime Minister Hun Manet’s visit to Thailand to meet then-Prime Minister Srettha Thavisin in February.

Mr. Kurujit urged the government to form the joint technical committee, which should include representatives from the foreign affairs and energy ministries, the National Security Council, and military officials. He also suggested that the government seek input from both supporters and opponents of the OCA before advancing negotiations.

“The government must reassure all stakeholders that it is acting in the nation’s interest rather than for any potential personal gain,” Mr. Kurujit stated.

He cautioned that Thailand will likely feel the effects of reduced domestic gas output from existing fields in the Gulf, which are expected to be depleted within 15 years, following peak production levels reached in 2012.

Last year, Thailand’s natural gas consumption ranged from 4,200 to 4,300 million standard cubic feet per day, with imported LNG accounting for 33% of this total—up sharply from just 5% in 2015, according to the Department of Mineral Fuels.

Continuing to import LNG may expose the country to price volatility, resulting in higher electricity generation costs and increased utility bills for both businesses and households. The Electricity Generating Authority of Thailand might be asked to assist in subsidizing electricity prices, but this would exacerbate its current multi-billion baht losses attributed to prior subsidy programs.

The OCA, claimed by both Thailand and Cambodia, holds potential as a new natural gas source, located near the Bongkot and Erawan gas blocks in the Gulf.

Mr. Kurujit noted that the government could link the OCA to PTT Plc’s gas pipeline network, which is situated only 50-100 kilometers away. He indicated that authorities could complete the installation of new pipelines connecting to the existing ones in just 4-5 months.

Currently, Thailand operates three gas pipelines with a carrying capacity of 3 billion cubic feet per day, transporting 2 billion cubic feet of gas daily from the Gulf.

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