Unocal Corp. subsidiary Unocal Thailand, Ltd. has signed a heads of agreement with Thailand's PTT Public Co. Ltd. (PTT) to amend and extend two gas sales contracts. The agreement also increases contracted sales volumes from 740 MMcf/d to 1,240 MMcf/d.
Unocal Thailand and its co-venturers plan to finalize the terms and conditions for the sales contracts amendments and extension with PTT. The agreement would provide for a long-term extension of the Erawan and Unocal 2/3 contracts, which cover all of Unocal's natural gas and condensate production in the Gulf of Thailand except for the Pailin field.
"We are prepared to make the large investments in further exploration drilling, production facilities, wellhead platforms, and development drilling that will be required to deliver the increased gas volumes," Randy Howard, president of Unocal Thailand, said.
Howard said Unocal plans to invest several billion dollars over the life of the contracts starting in 2004 to provide additional gas supplies to meet Thailand's energy needs. "We will finalize our project capital requirements once final terms and conditions have been signed," he said.
The agreement would increase contract volumes from 740 MMcf/d to 850 MMcf/d with the completion of PTT's third transmission pipeline in 2006. The volumes would increase to 1,240 MMcf/d in subsequent years to meet the market demand.
Unocal is operator with 64% working interest. Co-venturers are Mitsui Oil Exploration Co. Ltd. and PTT Exploration and Production Public Co. Ltd.
Earlier this month Unocal signed an amendment to the sales contracts covering natural gas production from the Pailin field offshore Thailand. That agreement increased the contract quantity by nearly 12% to 368 MMcf/d.