Mr. Punnachai Footrakul Vice President, NGV Marketing Department PTT Public Company Limited, Thailand 3 December, 2014
1. Overview of Using Energy in Thailand 2. Key Factors for NGV Market Growth in Thailand 3. Major NGV Domestic Challenges 4. Management of Each NGV Target Sector 5. Conclusion 2
1. Overview of Using Energy in Thailand 2. Key Factors for NGV Market Growth in Thailand 3. Major NGV Domestic Challenges 4. Management of Each NGV Target Sector 5. Conclusion 3
1.1 Energy Usage of Thailand in 2013 Share of Energy Usage by fuel types [CATEG [CATEG ORY ORY NAME] NAME] [CATEGOR 2% 5% Y NAME] [VALUE] [CATEG ORY NAME] [VALUE] [CATEG ORY NAME] [VALUE] Share of Energy Usage by sectors Total energy usage of 2,001 KBD (Crude oil equivalent) [CATE36% GORY NAME] [CAT EGOR Y NAM E] [CATEG ORY NAME] 22% 5% [CAT EGOR Y NAM E] [VAL UE] Source : Ministry of Energy, Thailand 4
1.2 Thailand mainly relies on Energy Import Proportion of สEnergy ดส วนการน Import/Domestic าเข า/ผล ตในประเทศ Production ป 2554 Values in 2013 Import Domestic Production Import Value (Million US Dollar) Crude oil 85% 15% 32,760 Coal/Lignite 70% 30% 1,209 Natural Gas 20% 80% 4,473 Electricity Petroleum products 10% 90% 4% 96% 614 4,088 Remark: Exchange currency rate = 32.855 Baht/USD (as of 29Nov,2014) Source: Energy Policy and Planning Office, Ministry of Energy Total Energy Import Value 43,144 5
1.3 Supply and Demand of Natural Gas in 2013 Supply Production/ Transportation Application 5,057 MMSCFD 1. Domestic Gas Supply 80% Natural Gas Pipeline System 4,568 MMSCFD 1. Electricity (59%) Gulf of Thailand (77%) 2. Petrochemical & LPG (20%) On-shore fields (3%) 2. Gas Import Myanmar (16%) LNG (4%) 20% 3. Industry (14%) 4. Transportation /NGV (7%) Source : Energy Statistics, Energy Planning and Office, Ministry of Energy, Thailand 6
1.4 Supply and Demand of LPG in 2013 REFINE RY 35% Supply of LPG Total of 7.4 Million Tons IMPORT 9% Gas Separati on Plant [PERCE NTAGE] Petrochem FEEDST OCK 35% Demand of LPG Total of 7.5 Million Tons [CATEG ORY NAME] 1% AUTOM OBILE 24% COOKI NG 32% [CATEG ORY NAME] [PERCE NTAGE ] Government lessened the role of using LPG by gradually increasing the LPG price since 2012 (after freezing LPG price for long time), but still not reflecting the actual LPG cost.
1.5 Proportion of using Fuel for Transportation Unit: KTOE 4% 7% 29% 21,382 21,641 20,240 19,067 19,397 1,238 2,071 1,073 778 794 2,498 1,282 1,623 2,072 2,753 5,606 5,526 5,463 5,741 6,106 10% 13% 28% 60% 11,401 11,454 11,638 11,906 10,712 49% 2009 Diesel 2010 Gasoline 2011 NGV LPG 2012 Auto 2013 Source: Energy Policy and Planning Office, Ministry of Energy 8 8
1. Overview of Using Energy in Thailand 2. Key Factors for NGV Market Growth in Thailand 3. Major NGV Domestic Challenges 4. Management of Each NGV Target Sector 5. Conclusion 9
2. Key Factors for NGV Market Growth in Thailand 10
2.1 Key Factor : Main Gas Supply from Domestic Sources Onshore Fields Proportion of gas supply sources (Year 2013): 80% of gas from Domestic Sources 16% 4% NG Fields in Myanmar LNG Import 3% 5,057 MMSCFD Offshore Fields in Gulf of Thailand 11 Gulf of Thailand Fields in Myanmar 77% On-shore fields LNG Import Source of Information: Energy Statistics, Energy Planning and Office, Ministry of Energy, Thailand 11 11
2.2 Key Factor : NGV Marketing Programs supported by PTT in 2003-2009 Number of accumulated NGVs (unit) 180,000 Soft Loan cooperating by commercial banks and PTT 162,023 160,000 140,000 Converted Truck Pilot Project (with 12,500 USD/Vehicle) 127,735 120,000 100,000 80,000 60,000 Converted Personnel Car Program (with discount of 330 USD/Vehicle) Supporting NGV Taxi Program: (accumulated 42,600 NGV taxis) 55,900 40,000 20,000 1,500 4,000 10,280 25,730 0 2003 2004 2005 2006 2007 2008 2009 2003 2004 2005 2006 2007 2008 2009 Personal car/van/pickup Taxi/ Tuk Tuk Bus/Truck 12 12
2.2 Key Factor : Government Incentives for NGV since 2007 Import Duty Excise Tax Others Exempt Import Duty for o CNG cylinder and conversion kit type I until 2009 and type II- IV until 2011 o CNG cylinders produced by ASEAN+3 countries to 0% (No time limit) o Dedicated NGV of new engine (No time limit) o Imported CKD bus chassis with engine (No time limit), except CBU chassis with engine until 2011 o Imported CKD Passenger Van until 2012 Reduce Import Duty for o CNG Refueling Facilities to 1% (No time limit) Reduce excise tax for o OEM passenger car and minibus not over 3000 cc. engine from 30% to 20% (No time limit) o Aftermarket converted NGVs from 30% to 22% but not exceed 1,405 USD until 2011 Grant 66 Million USD to be Revolving Fund for NGV Passenger Buses in Bangkok with very low 0.5% interest rate annually (2007 2009) Reduce 50% of Road tax dedicated NGV and 25% for Bi-fuel or DDF (No time limit) Note: CKD = Complete Knock-down / CBU = Complete Built-up Unit 13
2.3 Key Factor : Increasing Oil Price leads to rapid NGV demand in Thailand ม.ค. 48 เม.ย. 48 ก.ค. 48 ต.ค. 48 ม.ค. 49 เม.ย. 49 ก.ค. 49 ต.ค. 49 ม.ค. 50 เม.ย. 50 ก.ค. 50 ต.ค. 50 ม.ค. 51 เม.ย. 51 ก.ค. 51 ต.ค. 51 ม.ค.52 เม.ย.52 ก.ค. 52 ต.ค. 52 ม.ค. 53 เม.ย. 53 ก.ค. 53 ต.ค. 53 ม.ค. 54 เม.ย. 54 ก.ค.-54 ต.ค.-54 ม.ค.-55 เม.ย.-55 ก.ค.-55 ต.ค.-55 ม.ค.-56 เม.ย.-56 ก.ค.-56 ต.ค.-56 ม.ค.-57 เม.ย.-57 ก.ค.-57 ต.ค.-57 10,000 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 No. of NGVs No. of stations NGV World Dubai Crude Oil Review (USD/BBL) 59 173 52 377 87 1,016 40 2,910 140 75 4,217 88 5,872 118 108 6,767 7,998 106 8,434 108 CNG Volume (ton/day) 8,798 2005 2006 2007 2008 2009 2010 2011 2012 2013 Oct,2014 10,285 25,371 55,868 127,735 162,023 225,668 300,581 374,857 438,821 459,302 43 102 167 303 391 428 469 483 490 497 87 14
1.00 0.90 0.80 0.70 0.60 0.50 0.40 0.30 0.20 0.10 0.00 2.3 Key Factor : NGV/ LPG auto are controlled by the government The NGV retail price is the lowest fuel price, comparing with other fuel on the same BTU heat basis. Fuel Price USD/Liter equivalent (on the same BTU heat basis) 0.95 Save 69% 0.29 0.89 0.36 % Save % Saving of NGV Price from other fuel price Save 60% Save 42% 0.43 0.25 Gasoline NGV Diesel NGV LPG NGV Auto Remark: Exchange currency rate = 32.855 Baht/USD (as of 29Nov,2014) 15 15 15
2.4 Key Factor : Reliability in Safety Safety is very crucial that NGV standard must be followed strictly by all parties concerned as follows: Government Stipulate measures and law for NGV safety and standard Provide NGV safety inspection continuously Service Providers (Suppliers, NGV Conversion Companies, Inspectors, Owners of NGV Service Stations) Conform to law and NGV safety standard NGV Users Conform to NGV maintenance manuals and NGV safety standard 16 16
2.5 Key Factor : Participation in OEM NGV Market Trend of OEM NGV market is hit more than after-market conversion, both Light Duty Vehicles (LDV) and Heavy Duty Vehicles (HDV). 45% 222,069 51% 52% 25% 37% OEM NGVs LDVs HDVs 17
Natural Gas Pipelines 2.6 Private Partnership in all NGV Business Chain NGV Station/ Logistic Conventional stations (120 units) NGV Users LDVs: 392,325 Units Natural Gas Field 21% 20% 62% 21% Mother stations (20 units) NGV Trailer (1,458 Units) Daughter stations (357 units) HDVs: 66,977 Units Total: 459,302 units % Private Ownership (as of 31 Oct, 2014) 18 18
1. Overview of Using Energy in Thailand 2. Key Factors for NGV Market Growth in Thailand 3. Major NGV Domestic Challenges 4. Management of Each NGV Target Sector 5. Conclusion 19
Natural Gas Pipelines 3.1 Basic Infrastructure in Thailand Limitation of Gas Distribution Pipeline Network Mother stations NGV Trailers Daughter stations NGV Users Lower average CNG containing capacity of 3,000 kg, due to its vapor form Long time of loading gas (3-4 hours/unit) Speed Limit of not more than 60 km/hour Chance of gas shortage or irregular NGV service from stations locating far from mother stations Conventional stations Low CNG filling volume for a vehicle due to its vapor form Continuous NGV refueling service 20
3.2 PTT s Loss Burden from NGV retail pricing policy 0.49 0.14 (Unit: USD/ kg) Loss of NGV Sale = 0.14 USD/kg NGV Loss 3,500 3,000 2,500 2,000 PTT accumulated loss = 3,242 Million USD (Unit: Million USD) (as of 30 Sept,2014) 2,667 1,904 1,246 3,242 Actual Cost 0.35 1,500 NGV Retail Price 1,000 500 0 2 7 16 46 108 271 567 851 Sep-14 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Sept 14 Remark: 1. Actual CNG cost* studied by Energy Research Institute of Chulalongkorn University in 2011. 2. Exchange currency rate = 32.855 Baht/USD (as of 29Nov,2014) 21
1. Overview of Using Energy in Thailand 2. Key Factors for NGV Market Growth in Thailand 3. Major NGV Domestic Challenges 4. Management of Each NGV Target Sector 5. Conclusion 22
4. Management of Each NGV Target Sector Management by targeting into 3 NGV Sectors towards NGV Market Sustainability Sector 1 Sector 2 Sector 3 62% 49% 24% 10% 17% 16% 10% 12% Public Bus and Van Taxi and Tuk Tuk Personal Vehicle Truck and Trailer No. of NGVs Volume of CNG Usage 23 22
Sector 1: Subsidize only Public Transport Continuing to subsidize public transport by PTT PLC. with the unchanged NGV retail price 27% of CNG usage Sector 1 Gradually increasing the NGV retail price to reflect the actual CNG cost. 62% 73% of CNG usage 49% Sector 2 Sector 3 10% 17% 16% 10% 24% 12% Public Bus and Van Taxi and Tuk Tuk Personal Vehicle Truck and Trailer No. of NGVs Volume of CNG Usage 24 22
Sector 2: NGV is an option for Personal Users. NGV is a fuel of choice. Personal vehicle owners can choose to use other alternative fuels. Sector 1 Sector 2 Sector 3 62% 49% 10% 17% 16% 10% 24% 12% Public Bus and Van Taxi and Tuk Tuk Personal Vehicle Truck and Trailer No. of NGVs Volume of CNG Usage 25 22
Sector 3: Truck and Trailer should emphasize only on Specific NGV fleet stations and conventional stations. The number of truck and trailer is only 12%, but consuming CNG for 49% of total volume. Sector 1 Sector 2 Sector 3 62% 49% 10% 17% 16% 10% 24% 12% Public Bus and Van Taxi and Tuk Tuk Personal Vehicle Truck and Trailer No. of NGVs Volume of CNG Usage 26 22
1. Overview of Using Energy in Thailand 2. Key Factors for NGV Market Growth in Thailand 3. Major NGV Domestic Challenges 4. Management of Each NGV Target Sector 5. Conclusion 27
5. Conclusion: Lessons Learned Letting NGV market mechanism to run by itself will create NGV Market Sustainability. Gradually increasing NGV price to reflect the actual cost, while subsidizing the low incomers i.e. Public Transport. Public and fleet vehicles are mainly targeted with the option for personal cars. Free NGV Market Mechanism Target at heavy users The new unconventional gas (ex: CBG and LNG) need to be developed in the areas lacking NG pipelines. The network should emphasize on NGV conventional stations without too many NGV daughter stations. Conventional stations Safety and Reliability Safety is very crucial that the NGV standards must be followed strictly by all concerned parties. The development of OEM causes reliability and rapid NGV growth. 28
Thank You www.pttplc.com/pttngv/