PTT, ministry work to cut domestic gas supplies
THE ENERGY Ministry is working with PTT to cut natural-gas purchases from domestic sources to exploit the sharp plunge of LNG (liquefied natural gas) prices in the international market.
Energy Minister Anantaporn Kanjanarat also told reporters yesterday that the government had talked with Cambodian Prime Minister Hun Sen during his recent visit to Thailand about cooperating to develop petroleum deposits in the two countries' overlapping area in the Gulf of Thailand.
An agreement could be reached by next year.
Twarath Sutabutr, director-general of the Energy Policy and Planning Office, said the National Energy Policy Council had recently agreed for the ministry to draw up a plan to purchase LNG from the spot market as long as it is cheaper than domestic gas.
Areepong Bhoocha-Oom, permanent secretary of the ministry, said that because LNG spot prices had fallen below the contractual prices of natural gas in some domestic fields, PTT should reduce its purchases from domestic sources and import LNG.
"This is in line with our strategy to prolong depleting domestic gas reserves," he said.
At the current LNG spot price of US$7.8 per million British thermal units, some domestic fields such as the Platong block operated by Chevron in the Gulf of Thailand are selling gas at a higher rate, he said.
Out of about 4 billion cubic feet per day of gas purchased from domestic sources, about 1 billion is more expensive than LNG. However, up to 500 million cubic feet per day (mmcfd) of supply could be cut, he said.
Natural gas piped in from Myanmar is also costlier than LNG spot prices, but has a higher minimum volume of purchases, and reducing the purchases won't help preserve domestic gas reserves, he said.
Veerasak Pungrassamee, director-general of the Mineral Fuels Department, said PTT had already started to cut gas purchases from domestic sources. However, considering the minimum contractual obligations, the maximum reduction of domestic gas supply could be only 300mmcfd.
Also, cutting all that amount could lead to an increase in the price of natural gas for vehicles (NGV) and the electricity tariff, as the specifications for LNG are different than for domestic gas.
The maximum domestic gas volume that can be cut without affecting NGV and electricity costs is about 60-80mmcfd, he said.
Chokchai to enter partnership deal with Japan firms
FARM CHOKCHAI Group will form a profit-sharing deal with two Japanese partners
The company says the five-to-10 year partnership, will be a significant milestone for the expansion of its dairy products beyond Thailand into major markets in the region, including Singapore, Hong Kong and Indonesia.
Choak Bulakul, group managing director and chief executive officer, said the move would also be a significant step towards diversifying its business portfolio from agricultural goods such as pasteurised milk to more value-added dairy products, such as cheese and yoghurt.
"Over the past 20 years, we have gradually converted ourselves from a farm business into other diversified products and services. They are farming; services, including tourism and accommodation, retail and restaurants; and property. They currently account for one-third each of our total revenue," he said.
"We are strategically moving from basic agricultural goods towards more value-added products, which will give us more margin," Choak said.
Under the partnership, Farm Chokchai will supply raw milk from its dairy farm, which is claimed as the best inAsean and of similar quality to milk produced in Hokkaido.
Meanwhile, the Hokkaido-based dairy company will apply its production know-how in the manufacturing of dairy products. The Japanese trading firm will be in charge of distributing those products through its wholesale network, especially to Japanese restaurants in Thailand.
The products in the near future will be also exported through their wholesale and retail networks in neighbouring markets in the region, including Singapore, Hong Kong and Indonesia.
Choak said Farm Chokchai was currently able to produce about 20 tonnes of raw milk per day, of which 4-5 tonnes is pasteurised and sold at its Umm!..Milk shops. The group operates 25 Umm!..Milk shops in the Kingdom.
He said the poor economy had negatively affected its farm-tourism business this year, causing the number of visitors and tourist customers at its farm, located on 20,000 rai (3,200 hectares) in Pak Chong district, Nakhon Ratchasima, to drop by almost 30 per cent.
"We are looking to transform our farm-tourism activities to serve more corporate clients who want to bond with and educate their employees and customers with customer relationship management, especially on environmental-friendly activities. "Farm Chokchai has been awarded emissions-reduction certification and can be a role model for such educational tourism," Choak said.