PTT Looks to Tap East African Gas via Cove Energy Bid
Writer CNBC.com Asia
PTT will help provide a fast-growing market for the natural gas from U.K.-listed Cove Energy’s east African fields, if it wins a bidding war with Royal Dutch Shell, the CEO of the company Pailin Chuchottaworn told CNBC.
PTT Exploration and Production , a subsidiary of state-owned PTT, is offering 240 pence ($3.76) per share for Cove, which owns 8.5 percent of the Rovuma gas field off Mozambique. That’s higher than the 220 pence offered by Royal Dutch Shell.
Mozambique is set to become a major gas exporter after a number of discoveries off the country’s shore. Meanwhile, demand for natural gas is rising in Asia, with many companies seeking to profit from the trend.
PTT is building infrastructure for liquefied natural gas (LNG) in Thailand and foresees huge demand from Asia for the product, Pailin said.
“Thailand just completed our first regasification facility and the second phase will make Thailand be able to take up 10 million tons of LNG per year,” Pailin told CNBC Asia’s “Squawk Box” “So we are actually bringing to the table a very stable market for the product from the gas stream.”
PTT Exploration and Production shares have fallen since the company bid for Cove Energy. In all, the shares have dropped 7 percent this year, underperforming the Thailand stock market, which has risen 10 percent.
On the other hand, investors have been bidding up Cove’s shares betting on a counter-offer from Royal Dutch Shell. Cove shares closed Monday at 254.75 pence – a 15-cent premium to PTT Exploration and Production’s offer price.
In the interview, Pailin also said Myanmar will be a focus for PTT, adding that it hopes to build energy infrastructure in the resource-rich Southeast Asian nation and eventually sell gas there.
Political reforms in Myanmar have prompted Western countries to ease sanctions imposed on the country. That, in turn, has led to a rush of interest by foreign investors keen to tap Myanmar’s economy.
“Myanmar with 60 million population is a big enough market on its own. So it’s very important that we help the Burmese government turn their natural resource into economic wealth. This will help the Thai economy also,” Pailin said.
By CNBC’s Jean Chua.