Thai Shell cuts price of gas sold to Thai utility
BANGKOK, May 16 -- Thai Shell Exploration & Production Co. has negotiated an accord that cuts the price of natural gas it sells to the Electricity Generating Authority of Thailand (Egat) by almost one-third.
The new agreement, reached by the local unit of Royal Dutch/Shell Group and the Thai giant state power utility, makes gas from Thai Shell's Sirikit field the cheapest in the kingdom.
Sirikit gas will sell between $1.30 and $1.45/MMbtu with reference to fuel oil price . The 3-year pricing structure is retroactive to 1999, when the previous agreement expired. A permanent agreement is being negotiated.
A Thai Shell executive said if based on the previous pricing formula, the current selling price would be $2.05/Mmbtu, rather than the actual $1.45/MMbtu.
Thai Shell sells 45 MMcfd of Sirikit gas to Egat. About 290 tonnes/day of LPG is stripped from the gas. Sirikit's crude production is 24,000 b/d.
Estimates of Sirikit reserves at the end of last year increased by 8.8% to 148 million bbl while the gas reserves rose 1.2% to 250 bcf.