A global supply glut isn’t a situation exclusive to crude oil, but also to liquefied natural gas (LNG) which, according to Thailand’s PTT may persist until 2020, Kallanish Energy learns.
Tevin Vongvanich, CEO of the state-run oil and gas firm, said in an interview with CNBC “we don’t see a drastic change in the LNG price for the next two or three years on the spot market because of this oversupply situation.”
The official, however, is optimistic about the domestic LNG market, where PTT expects demand to double over the next five years. He added Thailand will rely “more and more” on imported LNG and that’s why the company is investing in LNG import facilities.
“Apart from growth in natural gas demand, we also have the potential depletion of the domestic resource in Thailand, as well as expiring contracts for buying gas from Myanmar,” Tevin said.
The company, which also has upstream activities in East Africa, said it managed to reduce production costs to be able to “survive” at an oil price of $30 a barrel. Upstream efficiency and cost reductions were aided by improved technology and digitalization, the CEO said.
“Overall, we have been able to reduce our costs maybe by about 20% at the minimum — 20-30% depending on the operations, over last year,” he told CNBC.