COVER STORY

RECOMMEND (230)

FACEBOOK

TWITTER

PLUSONE

MORE

E-MAIL

PRINT

TEXT SIZE

If Burma were to go war against Thailand, its weapons systems build-up would ironically have been financed by a Thai state-controlled company.

 

---------------------------------------------

 

How Much does Rangoon get from the Gas?

 

Gas sales agreements, or GSAs, are complicated. Neither the Burmese government nor any of the firms involved in the two gas projects have made the contract details public. The estimates below are based on extrapolations and are ballpark figures, not exact statistics.

 

Gas is priced per million British Thermal Units, or BTUs (the quantity of heat required to raise the temperature of one pound of water from 60ฐ Fahrenheit to 61ฐF at a constant pressure of one atmosphere). A BTU measures the heating value of an energy source and is used to compare the prices of different types of energy.

 

Every gas field in Thailand has a separate contract with PTT. The contracts vary slightly from field to field. Gas prices at the fields are reviewed every six to 12 months depending on the individual GSA. The prices are indexed against a number of variables, the most important being the average oil price for the previous period. Thai gas prices are about 40 percent price elastic to Dubai crude—that is, if the price of a barrel of Dubai crude increases by US $10, the equivalent heating value in gas would increase by $4.

 

The average price of gas from a Thai field is about $3.20 per million BTUs. While neither of the two Burmese consortiums nor PTT has ever spelled out how much the Yadana and Yetagun gas is sold for, extrapolations from company reports suggest a price of about $3.70 per million BTUs in recent years (with high oil prices this year, the price is almost certain to have increased).

 

The heating value of the Yadana field gas is 712 BTU/cf (per cubic foot). Given a daily contract quantity, or DCQ, of 525MMcf/d at a current price of $3.70 per million BTUs, Thailand’s PTT is paying about $1.383 million a day, or $505 million a year.