Session 4: Oil Stockpiling

Updates

THAILAND

1

Content

Oil and Gas Supply and Demand Situation

Regulatory Overview

Policy related to oil and gas stockpiling

Challenge, barriers, resources needed

2

Oil and Gas Supply and Demand Situation

3

63

%

62

%

60

%

57

%

57

%

55

%

54

%

54

%

55

%

53

%

54

%

55

%

54

%

5% 5% 6% 7% 9% 10% 12% 13% 13% 13% 12% 12% 12%

0

200

400

600

800

1,000

1,200

1,400

1,600

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Final Energy Demand (KBD Crude Oil Equivalent)

SOLID FOSSIL FUEL PETROLEUM PRODUCTS ELECTRICITY NG IN INDUSTRY

1,042

1,500 AAGR 3.0 % (2005-2017)

53

%

52

%

50

%

48

%

47

%

46

%

45

%

45

%

45

%

45

%

46

%

47

%

47

%

34

%

34

%

36

%

38

%

40

%

42

%

43

%

45

%

44

%

45

%

43

%

43

%

40

%

0

500

1,000

1,500

2,000

2,500

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Primary Energy Supply (KBD Crude Oil Equivalent)

Oil/Petroleum Products NG Coal/Lignite Hydro/Electricity

1,665

AAGR 2.8 % (2005-2017)

2,290

NG Share

Avg. 41%

Oil Share

Avg. 47%

NG Share Avg. 10%

Oil Share Avg. 56%

Growth Rate (%) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 AAGR

Oil Supply -1.9 -2.0 -2.0 -3.9 -2.6 7.4 -1.2 5.6 4.3 -0.5 3.9 3.0 9.0 1.5

NG Supply 9.2 2.3 6.2 5.4 5.2 14.9 3.3 9.8 2.2 0.8 0.3 -1.9 0.9 4.5

Growth Rate (%) 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 AAGR

Oil Demand -1.1 -2.4 2.2 -3.5 1.8 1.5 2.8 5.3 2.7 0.5 5.0 4.2 2.4 1.6

NG Demand 1.3 8.0 25.4 19.9 21.9 18.8 25.8 16.1 2.8 2.5 -1.0 -0.6 -1.3 10.7

• In the year 2017, Total Energy Supply was 2,290 KBD (crude oil equivalent), or 9% up

whereas Final Energy Demand was 1,500 KBD (crude oil equivalent), or 2.4% up.

In 2017, Oil and Gas share about 87% of the Total Primary Energy Supply,

and they share about 66% in Final Energy Demand.

The 54% share of Final Energy Demand is for Petroleum products.

• From the Historical Data, from 2005 to 2017 :

Oil Demand in Thailand has increased by 1.6% per annum since 2005.

During the year 2015-2017, it shows a highly growth in Oil’s Demand and Supply.

4

72.8 73.0 73.5 77.0 78.8 80.4 79.4 80.8 80.0 79.9

75.3 75.1 71.5

18.9 20.7 21.3 22.2 23.5 22.8 22.4 22.0 21.4 21.8 21.5 23.2 19.6

52.5 53.0 54.5 57.4 60.9 60.7 61.6 61.3 61.2 61.3 58.1 59.8

52.8

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

90.0

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Self-sufficiency ratio by Fuel Type (%)

NG Crude Oil/Condensate Total Primary Energy Supply

NG Avg. 77%

TPES Avg. 58%

Oil Avg. 22%

• For the Self- Sufficiency level.

Oil & Gas show a Downward Trend since 2016.

As a result, the import dependency is expected to rise in the Long Term.

Oil and Gas Supply and Demand Situation

Remark:-

Total Primary Energy Supply: TPES

Regulatory Overview

Thailand’s current oil stockpiling is private stocks.

Any oil company having volume of fuel trade per year from 100,000 metric tonnes and

upwards (or equivalent to 120 million litres), or any LPG trader having trade volume per

year from 50,000 metric tonnes and upwards is obligated for oil or LPGas stockpiling by

law as follows;

Mandatory Oil/ LPGas Stockpiling :-

Oil: The government obligates refinery and oil traders to hold stock with a certain amount of

- Crude oil at 6% or equivalent to 21.5 days of crude demand /

- Oil products at 1% or 3.5 days of domestic demand.

The current LPG legal reserve is at 1% of domestic demand

5

Policy related to oil and gas stockpiling (1/2)

Update

LPG: In 2017, Thailand has pursued LPG Free Market policy aims to reflect the true cost of each source of supply in LPG prices.

The government decided to increase LPG legal reserve from 1% up to 2 % in 2021, it is

not only because of the LPG Free Market policy but also according to the Thailand’s

Gas Plan (2015-2036); projection of Natural Gas from the Gulf of Thailand will share

smaller amount in the overall gas supply since 2021. Consequently, the country will

heavily rely on more LPG importation and it could affect energy security and the trade

balance of the country. Hence, a higher level of Gas Stockpiling should be applied.

6

Oil Stockpiling Policy

Policy related to oil and gas stockpiling (2/2)

Update

Oil : In 2017, Thai government, by the Ministry of Energy, is conducting a study to

explore possibility on establishing a Strategic Petroleum Reserve (SPR)

Regarding to the Thailand’s Oil Plan (2015-2036); The government plans to

establish a government oil stockpile instead of adding to the responsibility of private

sector to maintain a higher level of oil stockpiles. Meanwhile, It is currently in the

process of selecting a project consultant to study the SPR, which expected to get a

result of the study by the end of 2018 or the first quarter of 2019.

7

Oil Stockpiling Policy

Challenge, barriers, resources needed

In Thailand, the development of stockpiling has made a progress reached 43 days

of domestic consumption during 2013-2015, which is increased from 36 days in

2012.

However, after a new global oil sources have been discovered in 2015, which

result in less tension on oil supply. Ultimately, the government decided to

decline the legal reserve for a private sector to 25 days since 1 November

2015.

In the meantime, the government is conducting a study to explore possibility

on establishing a Strategic Petroleum Reserve (SPR) which aims to increase

Thailand’s oil security. However, it can not deny that finding a new financing

source for oil-stockpiling development would not be an easy task.

8

Challenge, barriers, resources needed

1,022 1,027 1,027

1,227 1,227 1,227 1,227 1,227 1,234 1,249 1,249 1,232 1,232

909 925 921 925 937 962 936 977

1,077 1,028

1,132 1,095 1,064

500

600

700

800

900

1,000

1,100

1,200

1,300

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

10

00

Ba

rre

ls/d

ay

Refinery Capacity

Refining Capacity Actual Operation

9

33%

67% 1,771 1,775 1,768 1,734 1,768 1,847 1,868 1,966

2,094 2,066 2,182 2,276 2,257

0

500

1,000

1,500

2,000

2,500

3,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

1000 B

arr

els

/da

y

Oil Supply-Demand Balance in Thailand

Import (Net) Production Consumption

0

50

100

150

200

1000 B

arr

els

/da

y

Oil Products Import

Import

Moreover, as the domestic consumption for oil show an increasing trend and a highly importation of oil products during past years. Besides, refinery capacity utilisation has almost reached their maximum capacity, in order to cover the upwards trend of domestic and foreign demands.

It is obvious that the capability of storage facilities at oil terminal will not be sufficient in the near future, whereas the country’s policy is moving towards a renewable energy, such as bio-fuel in vehicles and encouraging the use of electric vehicles in transport sector.

This factor has effected on investors’ confidence that will suspend the

expansion of storage facilities at oil terminals.

These indicators reflect a rough way to move up oil stockpiling into a higher level, since the private oil stockpiles is the only system at present.

Thank you for your kind attention

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