The Energy Ministry is prepared to impose regulations next year requiring an increase in the statutory oil reserve from the present 36 days of consumption to 45 days, said Energy Ministry permanent secretary Norkun Sitthi-phong.
He made the remark while on a study tour of Fukuoka, Japan, to learn about the Strategic Petroleum Reserve of Shirsashima Oil Storage Company accompanied by senior ministry officials and members of the House of Representatives' Energy Committee from Sunday to Thursday this week.
He added that the government wanted to see the oil reserve increased to a maximum of 90 days to assure foreign investors that Thailand has sufficient supplies if an energy crisis were to erupt.
The ministry assigned the Department of Energy Business to conduct a feasibility study on the oil-reserve strategy and find ways to increase the statutory reserve from 36 to 45 days next year. The department has also studied a possible increase of the reserve to 90 days, which would require huge spending and incur high storage costs, including the construction of depots.
Japan has reserves of fuel, crude oil and finished oil products equivalent to 206 days of consumption. The government is responsible for 116 days of this, with private companies responsible for 90 days. The reserve is managed by Japan Oil, Gas and Metals National Corporation (JOGMEC). The country has 10 oil reserve depots with combined capacity of more than 253 million barrels.
Shirsashima Oil Storage Co, which was founded in 1981, is the country's third-largest oil reserve depot with total capacity of 35.2 million barrels, representing 6 per cent of the national reserve capacity. The amount is adequate for about 12 days of consumption.
"Undertaking the strategic oil reserve is like buying energy insurance," Norkun said. "If we've enough reserve, the investors will have confidence in investing in Thailand. However, we don't have as much money as Japan, so we have to devise short-term, medium-term and long-term strategies to set a clear direction for the reserve in a manner that will not put a heavy burden on the country's budget."
Japan's Ministry of Economy, Trade and Industry has oversight for the strategic oil reserve, directing the reserve policy and assigning JOGMEC to maintain the reserve for the government. In an energy crisis, METI is authorised to release such reserves to cushion the impact.
Nuttachat Charuchinda, PTT's chief operating officer for downstream petroleum business, said the company was ready to follow the government's plan to boost the oil reserve to 45 days, which would require PTT to build four tanks, each with capacity of 1 million litres to store reserve crude oil and finished oil products. The appropriate locations for storing crude oil are close to the sea and to refineries. PTT is also looking for locations to build these four tanks.
He said Sattahip Naval Base was an appropriate location for the strategic oil reserve, adding that PTT was ready to assume the role of managing the oil reserve depot for the government.
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Article source: http://www.thethailandlinks.com/2012/12/16/ministry-backs-45-day-oil-reserve-plan/
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