Gas pipeline costs dent PTT

PTT expects a sharp drop in net profits from its natural-gas business this year, due to the huge depreciation costs to be set aside ahead of an investment in a fourth pipeline.

Chitrapongse Kwangsukstith, senior executive vice president for the natural-gas business, said yesterday that net profit from the business should drop from last year as more than Bt10 billion will be reserved for depreciation costs for the third pipeline.

"This is despite the expected growth in revenue to over Bt200 billion this year," said Chitrapongse, who added that in 2006 the natural-gas business contributed more than Bt30 billion in net profit to the oil and gas conglomerate.

PTT plans to invest between Bt10 billion and Bt20 billion in the fourth pipeline to accommodate rising demand for natural gas by power plants and industrial plants.

The 300-kilometre pipeline from Map Ta Phut in Rayong to Saraburi will run in parallel with highways. Once completed in 2011, it will handle 2,000 million cubic feet of gas per day. The construction work will commence next year, starting from PTT's liquefied natural gas depot in Map Ta Phut.

PTT also has plans to lay a secondary pipeline from Ratchaburi to Chumphon, 300-350 kilometres in length.

The third pipeline will be completed and start transmission from the Chevron fields in the next three weeks. In May or June, it will begin transmitting gas from other sources. In 2011, the third pipeline will accommodate 5,000 million cubic feet per day.

PTT is also negotiating for more gas supply, including a pending deal with Burma against competitors from China and India.

Energy Reporters

The Nation
Thu, February 1, 2007