Thailand – Gas Policy Brief

The Government of Thailand has outlined a clear and consistent role for natural gas in the current and future energy mix as a cornerstone of the country’s energy ambitions to establish itself as a regional LNG hub. Natural gas is central to the development of national policies covering energy security, economic development and reducing greenhouse gas (GHG) emissions by 30% by 2030 from 2009 levels, in line with Paris Agreement commitments.

In 2020, 43% of Thailand’s primary energy came from natural gas – 70% of which came from domestic offshore production and the rest imported by pipeline from Myanmar, and as LNG from Qatar, Russia, Indonesia, Peru and Nigeria. Oil accounted for 37% and coal 14% with renewables not measured due to incomplete data. Natural gas generated 58% of Thailand’s electricity in 2020 with renewables contributing 13%.

The Alternative Energy Development Plan aims to increase the use of renewables in the primary energy mix to 30% by 2037 from a low base today. The plan focuses on using renewables for power generation, heat generation and biofuel production. It sets targets for developing community power plants at 1,933 MW, biomass power plants at 600 MW, biogas power plants at 183 MW, wastewater power plants at 600 MW and hybrid energy sources from solar-biomass-biogas at 550 MW.

The plan develops and promotes the use of solar greenhouses, solar-powered fish farm management systems, fast-growing trees for biomass production, and increases the use of wastewater to produce biogas for heat and electricity generation.

The Gas Plan 2018-2037 aims to support the growth of natural gas to reduce air pollution. It prioritises the exploration and production of domestic natural gas from the Gulf of Thailand to maintain production at 43 BCM per day. It will be preferentially used for industry, reaching 5% of total needs by 2037.

With declining gas production in the Gulf of Thailand and the Gulf of Martaban, LNG imports are expected to grow to 26 million tonnes by 2037 from 5.2 million tonnes in 2019.

The focus on domestic production means it will be important to finalise a joint development agreement with Malaysia and well as deal with overlapping claims with Cambodia.

The natural gas pipeline network will be expanded, and LNG terminals built to meet gas demand maintaining at least 60% utilisation of the network.

The Ministry of Energy is reforming and liberalising natural gas markets to attract new players, increase competition and build the experience of entrepreneurs especially for LNG import and transport, supporting the development of a trading hub.

More regulatory reform is needed to increase competition and improve the operating environment. Regional power market integration is a priority for Thailand and the government plans to invest in energy facilities to encourage Thai businesses to expand into neighbouring countries.