First, it was Singapore that made bare its plans to be an LNG hub in Asia. Not to be outclassed, Thailand too has expressed its own lofty ambitions to get into the race of being Asia’s premier LNG bunker trading hub.
There is plenty of reason why. According to The World Bank, more than 70% of Thailand’s electricity production comes from natural gas. With its cleaner properties and growing popularity in Asia where runaway demands led by China is changing all manner of dynamics, Bangkok is just where history wants it to be.
As it now stands, domestic output is providing for more than 70% of Thailand’s gas needs while pipeline deliveries from neighbouring Myanmar – where gas been found in abundance – account for the rest.
This was affirmed by Porrasak Ngamsompark, Acting Director of the LNG Management Bureau at Thailand’s Department of Mineral Fuels, at an event in Singapore recently when the city-state held its’ International Energy Week.
The nation’s Energy Policy also acknowledged with scientific details how it can turn the nation into a regional trading hub for the fuel. Any move to build a hub, if and when it does come to pass, will inject some $5bn into its economy between now and 2030.
From a geographical standpoint, there does appear plenty of promise for Thailand to be turned into a hub. It lies smack in the region where LNG demand is roaring – right from China, to Japan, to India, Cambodia, and Vietnam. What’s more it has the infrastructure to provide services for regional LNG trading, infrastructure which could get cranking as early as 2021.
In fact, Malaysia’s leading maritime analyst, Nazery Khalid, told gasworld, “Thailand is ranked 22nd as a major gas-producing nation in 2017, while it was the 13th largest consuming nation in the world. Its gas reserves are the 44th largest in the world [thus causing the Thai government] to develop its gas industry and strengthen its gas ecosystem.”
What Khalid has observed is that Bangkok is indeed pulling out all the stops. Its dominant energy company, PTT Public Company Limited (PTT), is spearheading efforts to increase Thailand’s gas consumption and gas infra/facilities development.
Hence, there is no dearth of potential in what Bangkok is seeking to accomplish. Yet for all the promise it holds, challenges stare at it blankly – especially when it is trying itself to compare with its supposed rival, Singapore. “Thailand needs to have access for ships. Motherships are still headed to and will be in Singapore,” extolled Kaushik Seal, a maritime technical expert with Singapore-based DNV GL, a well-known classification society, alluding to the obvious hurdles Thailand faces in its national ambitions.
He adds that if ever its northern neighbour makes a dash aimed at outfoxing Singapore, it would have to mean opening up the very strategic Kra Canal. Opening up that particular waterway entails not just a huge engineering challenge but would, in the process, incur huge costs and other ancillary works such as constant maintenance and capital dredging that could well take years and prove a drag on Thai finances.