PTTEP set for Erawan production

PTTEP set for Erawan production

Legal dispute delays access to gas block

PTT Exploration and Production Plc (PTTEP) expects to access the Erawan gas block to prepare for gas production within the next two months, following a delay involving a legal dispute.

Known as G1/61, Erawan, located in the Gulf of Thailand, the block is operated by US-based Chevron Corp whose concession expires in April next year.

PTTEP won an auction in 2018 to be its successor but is unable to enter the site because of an unsettled dispute between Chevron and the Department of Mineral Fuels over who will pay for transferable asset decommissioning.

Maylada Chayavadhanangkur, PTTEP’s vice-president overseeing G1 asset transition project (Erawan field), said the company expects to sign a “site access agreement” in the next two months and will prepare for production before the concession ends on April 1 next year.

Permanent secretary for energy Kulit Sombatsiri said he expects talks with Chevron to end the dispute will be concluded in this year’s fourth quarter.

Under the production-sharing contract (PSC) model, minimum gas production at Erawan is set at 800 million standard cubic feet per day (MMSCFD).

However, because of no new exploration, gas supply may be lower than the PSC requirement.

Ms Maylada said gas volume may decline to 500 MMSCFD from April next year, down from 1,000 MMSCFD at present, so PTTEP needs to increase gas production at other gas blocks by 300 MMSCFD to offset the decrease in gas supply.

The company expects to extract gas from Arthit and Bongkot gas blocks in the Gulf of Thailand — these blocks are currently producing 220 and 870 MMSCFD of gas, respectively.

It will also use imported liquefied natural gas to fulfil the PSC requirement.

PTTEP plans to take one year after its access to Erawan gas field to ramp up gas production to 800 MMSCFD.

It also plans to develop eight new gas rigs and transfer workers from Chevron to help with the production.

Orachon Ouiyamapun, senior vice-president for finance, said PTTEP’s petroleum sales in June were 413 kilo barrels of oil equivalent per day (KBOED), a rise from 354 KBOED last year, due partly to new sales volume from gas blocks in Oman and Malaysia.

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