3. Business Operation

1.  Products Features

3.1.1 Petroleum

Petroleum means crude oil, natural gas, condensate, related products and
other hydrocarbon products which are free in nature.

Crude oil means crude mineral oil and bitumen of all kinds which is
liquid in nature and is obtained from an oil well and may be obtained
through gas separation equipment but has not yet been refined or
purified.

Natural gas means hydrocarbon which is gas or vapor at the normal
temperature and pressure, and which normally has methane as it major
constituent.

Condensate means hydrocarbon which condenses in natural gas, and which,
when separated from natural gas, is transparent and has low specific
gravity (high API).

LPG means petroleum product which is obtained from crude oil refinery or
natural gas separation processes and which primarily consists of butane
and propane.

The characteristic of the crude oil and condensate is liquid in nature
and has a measurement in barrel while the natural gas is measured by
cubic foot. All petroleum products could be given into the heat
measurement in Barrel of Oil Equivalent (BOE). 1 cubic foot of natural
gas has approximately 1,000 BTU while 1 barrel of crude oil has
6,000,000 BTU

2.  Gas Transportation Pipeline:

PTTEPO has other major investment in other companies as well such as a
25% of the investment in Moattama Gas Transportation Company (MGTC) and
19.31784% in Taninthayi Pipeline Company (TPC) to conduct the business
of pipeline laying from Yadana and Yetagun projects from Myanmar to Thai
borders.

3.1.3 Jetty, Bulk Tank and Warehouse

This is to support PTTEP’s offshore assets operating in the Gulf of
Thailand and also to provide support, both Jetty and Warehouse services,
to other customers such as Chevron, Hyundai, Pearl Oil, and Thai Nippon
Steel for shipment of goods and petroleum relating products as well as
storage of
the equipment using in E&P activities.

Jetty has a total length of 380 metres and is divided into six berths,
each approximately 65 metres. The deck of the jetty is +2.3 metres above
Mean Sea Level (MSL). The approaches and the water depth of the Jetty is
about 8 metres below Chart Datum. The facilities on the jetty include
silos for Barite, Base Oil and Cement. Our Jetty has received the letter
of approval as a port facility which fully complies with ISPS CODE
(International Code for the Security of Ships and of Port Facilities).
This was issued by Marine Safety and Environment Bureau, Marine
Department.

Warehouse and Yard Area has an estimated total area of 30 Rai for safely
storing all petroleum equipment such as tubing, casing and drilling
equipment. As part of a wider security system, CCTV is installed at
strategic locations throughout the Base and is monitored 24 hours a day
at the Operations Centre.

3.2 Factors affecting the opportunity or restriction in business

PTTEP does its petroleum exploration and production in the Kingdom and
abroad. The investment in foreign countries shall comply with conditions
and concession laws of those countries i.e. Production Sharing
Agreement/Contract or Services Agreement. Inside the Kingdom, PTTEP
shall comply with the Petroleum Act B.E. 2514 which sets out the details
and procedures for applying for and awarding petroleum concessions, the
period of production and also provides for various forms of benefits to
the government as owner of its petroleum resources. These forms of
benefits include royalty, petroleum income tax and other benefits. The
important points in the petroleum business operation are as follows:

3.2.1 Issue of Concession Areas

The Department of Mineral Fuels, Ministry of Energy as the responsible
agency delineates exploration blocks, and then invites oil companies to
submit applications for concessions.
The Petroleum Committee considers applications for concessions which are
initially screened by the sub-committee. The Energy Minister with the
approval by the Cabinet has the power to award and sign the concessions.
The government considers the qualifications of each applicant and will
take into account the proposed work program, adequacy of the investment
funds to be brought in and used in the exploration, the transfer of
technology, employment of Thai nationals, and also the utmost benefits
offered to the Kingdom.

3.2.2 Role of the Operator

A petroleum concession may be awarded to one concessionaire or to a
joint venture of two or more co-concessionaires. Since the petroleum
exploration and production business is associated with relatively high
risk, it is common for companies to join together in joint ventures in
order to diversify the risks. In a joint venture, one company will be
designated as “operator” to conduct the exploration and production
operations on behalf of the other co-venturers under the supervision of
a management committee composed of representatives of each company.
Other companies which participate in the joint venture are called
“non-operators”. The operator sets the cash call on all co-venturers to
finance the project. The non-operators through their representation in
the management committee participate in technical and financial
decisions. Generally, an oil company will become an operator of any
project, depending on the investment conditions, its readiness and
business strategies in that project.

3.2.3 Nature of Operations and Investment Decisions

Before any oil company decides to invest in petroleum exploration in the
Kingdom and abroad, it has to carefully consider its chances of
exploration success as well as other investment risk factors. A study of
information available is made to determine whether the area has high
petroleum potential and is commercial for production. The success ratio
of drilling of exploration wells in neighboring areas as well as the
risk factors of the investment countries are taken into account. In case
it found the project commercial to produce, then it will apply for a
petroleum concession or will “farm-in” to an existing petroleum
concession.

After the oil company is awarded a concession area for exploration of
petroleum, an exploration program will be conducted which is normally
taking 2-3 years. If the petroleum reserves are found, the amount of
investment funds required for the development stage and the value of
sale of the petroleum in the quantity of reserves expected to be
recovered will be evaluated. If such study indicates that the reserves
are worth investing in, that petroleum field will be considered to have
sufficient commercial viability to justify further investment in
development. The operator shall apply for an approval of petroleum
production and shall start its production at the same time. The
operation is still able to explore the rest of the existing areas if it
is within the time frame of exploration mentioned in the concession. At
this stage, the operator must have a certain degree of confidence about
the investment because the investment required for such development is
very high. The operator will normally identify buyers of petroleum in
advance, and a long-term sales agreement for petroleum to be produced
will be signed. At present the PTT is the biggest petroleum buyer in
Thailand. The principal elements of the sales agreement for petroleum
are the method of determination of the sales price and quantity of
petroleum to be delivered. In this regard, when the commencement period
in the contracted is reached, the buyer must be responsible the
petroleum produced immediately after the production commences. The sale
of natural gas from any domestic areas is presently made at the
well-head while the sale of natural gas from any foreign areas is made
at the Thai borders, in which case PTT must install gas pipe-lines
sufficient for the production amount specified in the gas sale
agreement. The sale of the crude oil is made at the buyer’s refinery
while the sale of the condensate is made at the Floating Storage Unit
(FSU) near the well-head.

3.2.4 Description of law relating to the business

At present, the operation of petroleum business in Thailand is governed
by two major enactments, namely, the Petroleum Act, B.E. 2514, and the
Petroleum Income Tax Act B.E. 2514, and its amendment. Several major
features of these laws are:

(1) an applicant for a concession must be limited company or a juristic
    person which has the same status as a limited company established
    under the law of Thailand or foreign law;

(2) the concessionaire, the co-concessionaire(s) and the co-venturer(s)
    must pay royalty which is normally paid by cash. However, the
    Minister may authorize a payment in kind of petroleum by a notice of
    at least not less than 6 months. The royalty may be used as credit
    against income tax (Thailand I) or be deducted as expenses (Thailand
    III);

(3) the rate of petroleum income tax may be prescribed not less than 50%
    but not over than 60% of the net interest from the petroleum
    business;

(4) interest paid cannot be deducted as expenses for income tax
    purposes;

(5) a concessionaire has right to obtain concessions for exploration
    blocks without limitation of number of exploration blocks.

Thailand I for the petroleum concessions issued by the Ministry of
Industry⁴ from B.E. 2514 to B.E. 2532 and the onshore petroleum
concession issued before B.E. 2525

Thailand II⁵ for all onshore petroleum concessions issued by the
Ministry of Industry⁴ from B.E. 2525 to B.E. 2532

Thailand III for the petroleum concessions issued by the Ministry of
Industry⁵ from B.E. 2533

Thailand IV for the petroleum concessions issued by the Ministry of
Energy⁶ from B.E. 2550

_________________________

⁴ Now is the Ministry of Energy

⁵ According to the Article 36 of the Petroleum Act (Issue 4) B.E. 2532,
all the holders of the petroleum in Thailand II have already moved to
Thailand III.

⁶ the Petroleum Act (Issue 6) B.E. 2550 has came into force 18 October
B.E. 2550

Details of Thailand I, II, III and IV Terms

  ------------- --------------- --------------- --------------- ---------------
  Term          Thailand I      Thailand II     Thailand III    Thailand IV

  Royalty Rates 12.5% of income 12.5% of income progressive     progressive
                from sale or    from sale or    rate at sliding rate at sliding
                disposal of     disposal of     scale 5-15%,    scale 5-15%,
                petroleum which petroleum which deemed to be    deemed to be
                may be treated  may be treated  expenses which  expenses which
                as tax credit   as tax credit   could be        could be
                                                deducted in tax deducted in tax
                                                calculation     calculation

  Petroleum     50% of net      50% of net      50% of net      50% of net
  Income Tax    profit from     profit from     profit from     profit from
                petroleum       petroleum       petroleum       petroleum
                business        business        business        business
                operation       operation       operation       operation

  Special       -               annual          special         special
  Benefits                      benefits, and   remunerator     remunerator
                                annual          benefit which   benefit which
                                production      may be taken as may be taken as
                                bonus           deduction       deduction

  Exploration   8 years with 4  8 years with 4  6 years with 3  6 years with 3
  Period        year extension  year extension  year extension  year extension

  Production    not exceeding   not exceeding   not exceeding   not exceeding
  Period        30 years from   30 years from   20 years from   20 years from
                expiry date of  expiry date of  expiry date of  expiry date of
                exploration,    exploration,    exploration,    exploration,
                with extension  with extension  with extension  with extension
                not exceeding   not exceeding   not exceeding   not exceeding
                10 years        10 years        10 years        10 years

  Concession    not exceeding   not exceeding   not exceeding   not exceeding
  areas         10,000 sq. km   10,000 sq. km   4,000 sq. km    4,000 sq. km
                per exploration per exploration per exploration per exploration
                block, up to 5  block, up to 5  block, up to 5  block without
                exploration     exploration     exploration     limitation of
                blocks          blocks          blocks          number of
                                                                exploration
                                                                blocks
  ------------- --------------- --------------- --------------- ---------------

3.3 Marketing

PTTEP has invested in 42 E&P projects, of which 15 projects being
domestic and 27 projects being overseas. PTTEP’s policy is to supply its
products namely natural gas, condensate, crude oil and LPG from both
domestic and overseas sources primarily to the Thai market. Moreover,
the Company’s expansion abroad of E&P activities means an additional way
of generating income for Thailand.

In 2008, PTTEP and its subsidiaries averagely sold a total of 219,314
BOED, a 22 % rise from the previous year. The Company started the
production of natural gas and condensate from the Arthit Project on 26
March 2008. While the Vietnam 9-2 Project initiated crude oil and gas
production on
25 July 2008. Sales revenue can be found in the summary table below.

  ----------------------- ----------------------- -----------------------
  Product                 Volume                  Value (Million Baht)

  Natural Gas (MMSCF)     332,334                 56,685

  Condensate (MMBBL)      11.4                    35,253

  Crude Oil (MMBBL)       13                      39,781

  LPG (Metric Tons)       89,650                  902
  ----------------------- ----------------------- -----------------------

3.3.1 Marketing Characteristics

PTTEP’s goals and policies are to source and supply petroleum to the
Thai market. PTT Plc is currently the major buyer of all products which,
after processing, find utilization in power plants, the petrochemical
industry, the transportation sector, industries and households.

The sales of the output that are found on the international fields vary
from country to country as detailed below:

(1) Yadana and Yetagun Projects in Myanmar: The gas produced from both
    of these projects is primarily sold to Thailand. While some are sold
    to Myanmar to utilize as domestic power generation. Condensate from
    Yetagun project is sold and consumed domestically in Myanmar, with
    the leftovers sold in regional spot markets.

(2) Oman 44 Project: Gas produced in this project is sold to the
    Sultanate of Oman. While the condensate produced is sold to PTT Plc
    for consumption in Thailand.

(3) Vietnam 9-2 Project: Crude oil produced is sold in spot markets,
    while gas produced is sold to Vietnam Oil and Gas group, a state
    enterprise of the country.

(4) Domestically produced crude oil: Due to the restrictions and
    constraints in the refining process, some crude cannot be refined
    domestically and therefore it must be exported and sold in the
    international markets.

The trading of each kind of petroleum products varies, according to the
timeframe of the contracts and the price structures. Further details are
outlined below.

1. Natural gas

Due to the capital intensive nature in developing gas fields, gas sales
agreements (GSAs) must be initiated before any investment is made. The
GSAs are typically long-term ranging from 15-30 years. Prices, volumes
and point of sales are then stipulated in the contract. The designated
transfer point for all domestically sold gas is from the wellheads. The
buyer will invest in the pipelines used to take the gas from the
designated point. Gas derived from Myanmar which is sold to Thailand has
a designated handover point at the boarder between the two countries.
The seller is responsible for investment in the pipelines from the
wellhead to the boarder. The prices for gas are usually referenced to
the fuel oil prices and economic indices. This is so that the cost of
production will be reflected, while keeping the price competitive
throughout the GSAs. Sales volumes are based on the assessed reserves on
the negotiation date. Both the buyer and seller are obliged to honor the
agreement. The seller stipulates take-or-pay conditions in its GSAs. If
the buyer is unable to take the gas defined by the GSA, the seller is
guaranteed of the entire income to be paid by the buyer. The buyer is
entitled to take delivery of gas free if charge in subsequent years.
Conversely, should the seller fail to honor the contract, the buyer is
entitled to preserve the rights and levy a fine through discounts of the
volumes stipulated in the agreement.

In 2008 PTTEPI, a subsidiary that operates and holds all of the shares
in the Myanmar M9 Project, located in the Gulf of Moattama, signed the
Head of Agreement (HOA) covering a gas sales volume of 300 MMSCFD,
consisting of 240 MMSCFD to be sold to Thailand and 60 MMSCFD to
Myanmar; in both cases the price is referenced to those stipulated in
the current GSAs.

2.  Condensate and crude

The company sells the majority of its condensate and crude to the
domestic market based on market prices. This is done by basing prices on
the regional crude and condensate prices; where contracts exist in both
short-term and long-term. While a certain amount find their way to the
spot markets.

3. LPG

LPG derived from the S1 Project is sold to PTT Plc under a long-term
contract, at a price referenced to the ex-refinery prices announced by
the government.

3.3.2 Competition

The competition level within the E&P industry in Thailand can be
regarded as non-threatening. This is due to the nature of the market
where demand usually exceeds supply. The types of contract utilized are
usually done so in long-term, where conditions stipulate take-or-pay
clauses, minimizing any losses which may occur.

Despite the current economic slowdown which may prolonged throughout
2009, consequently affecting the domestic energy demand. The previously
mentioned clauses ensured that the products will be sold in the volume
agreed, when the contract was signed. Leaving the current output and
sales close to those seen in 2008, and will likely little, if any,
affected by the economic slowdown.

Regarding the medium to long-term market, it is likely that the demand
for petroleum products will continue to grow. It is PTTEP’s commitment
to search and source new energy supply from both domestic and
international sources to meet the growing demand. The Company currently
has plans to develop the South Bongkot project in the Gulf of Thailand
and the Myanmar M9 Project in the Gulf of Moattama, where the output is
expected within the year 2012-2013. Furthermore, the Company has more
than 20 exploration projects in the hope of securing more petroleum
supply to meet future needs.

3.4 Production

3.4.1 Exploration and Production Stages and Technology

Exploration and production stages may generally be divided into 4 major
stages as follows:

(1) Exploration Stage

-   Primary geology and geophysics survey

-   Seismic survey

-   Interpretation of information from seismic survey

-   Drilling

(2) Appraisal/Delineation Stage

-   Study petroleum geology in detail and additional seismic survey

-   Well log interpretation

(3) Development Stage

-   Set the plan for the appropriate development

-   Construct the platforms, provide production facilities and drill the
    development wells.

-   The development of the production facilities in the sea includes
    Well head Platform, Processing Platform, Production Platform and
    Living Quarter.

(4) Production Stage

-   The production of crude oil or natural gas must be made through the
    Christmas tree and other production equipment including gauge so
    that the rate of production of each well may be ascertained

-   The follow up of the production proportion of the water and
    petroleum, proportion of crude oil and natural gas, the decline of
    pressure in the petroleum levels and the forecast of the production
    in the future

-   Workover must be performed regularly to improve the rate, the
    duration and effectiveness of the production

-   In the Gulf of Thailand, the natural gas which is produced will be
    sent to the natural gas separation plant and electricity power plant
    while condensate will be sent to Floating Storage Unit before the
    refinery.

PTTEP is ready with its personnel, technology and equipment to do its
business effectively to achieve its company mission very well.

3.4.2 Petroleum Reserves

Petroleum Reserves can be divided into 2 categories according to the
possibility level, which are Proved Reserves and Unproved Reserves,
which can also divided into 2 categories: Probable Reserves and Possible
Reserves.

(1) Proved Reserves are those quantities of petroleum which, by analysis
of geological and engineering data, can be estimated with reasonable
certainty to be commercially recoverable, from a given date forward,
from known reservoirs and under current economic conditions, operating
methods, and government regulations. Proved Reserves means the petroleum
in reservoirs that can be commercially produced, relying on supporting
data of production rate testing. In some cases, Proved Reserves obtain
from well testing and/or analyzing of source rocks in that area or the
neighboring area already produced or having tendency to be able to
produce. Moreover, Proved Reserves will be able to produce by using the
existing equipment or the equipment installed in the future.

  (2) Unproved Reserves

-   Probable Reserves are those quantities of petroleum obtained from an
    analysis of geological and engineering data as same as Proved
    Reserves but having less possibility to produce due to the
    technology, rules, or economic conditions.

-   Possible reserves are t quantities of petroleum obtained from an
    analysis of geological and engineering data as same as Probable
    Reserves but having less possibility to produce due to the
    technology, rules, or economic conditions.

The Proved Reserves are reviewed annually by company’s earth scientists
and reservoir engineers to ensure rigorous professional standards. The
Proved Reserves are reported on a gross basis, which includes the
company’s net working interest and related host country’s interest. As
of 31 December 2008, the total Proved Reserves of all PTTEP and
subsidiary’ projects are 201 Million Stock Tank Barrels (MMSTB) for
crude oil and condensate, and 4,770 Billion Standard Cubic Feet (BSCF)
for gas. The total Proved Reserves (Consolidated Companies) in term of
oil equivalent is 944 Million Barrels (MMBOE). No reserves quantities
have been recorded for the hydrocarbon discoveries in Vietnam Blocks B,
Block 48/95 and Block 52/97, and Myanmar M9 project since no Gas Sale
Agreement (GSA) has been established.

3.4.3 PTTEP Petroleum Production

In 2008, the total production of PTTEP and subsidiary’s projects is 90.6
MMBOE or equivalent to the production rate of approximately 247,700
Barrels of Oil Equivalent per Day (BOED), approximately 38,700 BOED or
18% increase from last year. The production increase was mainly
attributed to the new petroleum production from Vietnam 9-2 and Arthit
projects.

3.5 Environmental Impact

For a petroleum exploration and production operation, an effective
environmental management system is developed to minimize the following
potential environmental impacts: -

(1) Land use and marine organism impact from sound vibration, which is
    the main environmental impact during seismic surveys.

(2) Water and soil contamination from discharges of drilling fluid and
    produced water, release of sludge and contaminated solid wastes, and
    accidental spills of oil and condensate during drilling and
    production activities.

(3) Air pollution from hydrocarbon releases and atmospheric emissions
    from gas flaring, gas venting and fuel combustion during drilling
    and production activities.

Currently, the above environmental impacts are regulated by the
Department of Mineral Fuels, which is under Ministry of Energy and is
the direct permitting agency, and the Office of Natural Resources and
Environmental Policy and Planning (ONEP), regulated by the Ministry of
Natural Resources and Environment, which issues the directive that an
environmental impact assessment must be conducted and approved prior to
any commencement of exploration and production projects

PTTEP has initiated efforts to reduce environmental impacts, and has
maintained a constant and continuous follow-up of this initiative,
including the following:

(1) Implementation of the ISO14001 Environmental Management System (EMS)
Standard for all operational sites and the PTTEP office building. In
accordance with ISO14001 requirements, an environmental management
system is followed in compliance with company policy, legislation and
other requirements in order to prevent pollution to environment, and to
ensure improvement in effective company performance. As a result, PTTEP
became the first petroleum exploration and Production Company in
Thailand and the Southeast Asian region to achieve ISO 14001
Certification.

(2) Study of environmental impact assessment prior to commencement of
new exploration and production projects, which is legally required in
order to ensure on-going monitoring and measurement programs to mitigate
any environmental impacts for operations in Thailand and overseas.

(3) Re-injection of produced water (wastewater separated from offshore
production processes) into subsurface reservoirs to ensure no overboard
discharging which might affect the environment.

(4) Monitoring of discharged wastewater quality from the production
process and the quality of seawater, sediment, benthic fauna and fish
around platform vicinity to ensure there is no exposure to health and
environmental hazards.

(5) Recovery of flare gas for electricity generator and sales.

(6) Oil Spill Equipment and response are provided to ensure
environmentally sound operations from any oil spill incident Tier 1 (<
20 tonnes), joining the Oil Industrial Environmental Safety Group (IESG)
for Tier 2 oil spill response incident (20-1000 tonnes) and EARL/OSRL
(East Asia Response Limited/ Oil Spill Response Limited) for Tier 3 Oil
Spill Response (>1000 tonnes).

(7) Provision of appropriate technology for waste disposal and treatment
(e.g. Mercury contaminated waste, oil contaminated waste) for
environmental impact abatement.

(8) Promotion of Safety, Security, Health and Environmental awareness
through a number of means, e.g., training, and monthly SSHE bulletins,
etc.

(9) Coordination and provision of support to other exploration and
production companies, the Petroleum Institute of Thailand, government
agencies and related associations in order to expand experience and
solve environmental problems for further improvement.

During the past 3 years, PTTEP has strictly complied with both Thai and
International legislation and other requirements concerning Safety,
Security, Health and Environment. In addition, PTTEP has been
continuously improving its positive environmental practices in
maintaining, developing and reducing environmental impacts by achieving
the ISO 14001 certification for Environmental Management System Standard
from AJA Registrars LTD. under UKAS (United Kingdom Accreditation
Service) accreditation, for all its operational sites as detailed below:

(1) Bongkot Project in the scope of “Exploration and production of
    natural gas and condensate”

(1) S1 Project in the scope of “Exploration and production of petroleum”

(2) PTTEP1 Project in the scope of “Exploration and production”

(3) Songkhla Logistics Base in the scope of “Provision of logistics
    services to offshore oil and gas operations”

(4) PTTEP Building in the scope of “Building management and maintenance
    services”

(5) Core research centre and logistics support for storage of core lab
    samples.

In 2006, PTTEP developed its Environmental management System to comply
with requirement of ISO 14001 version 2004, and all PTTEP operating
units were certified for that standard.

With regard to spill incidents; spills in 2006, 2007 and 2008 accounted
for 0.64, 0.07 and 2.56 tonnes/million tonnes of production
respectively. From these figures, it can be seen that the level of
spillage in the year 2008 was higher than in the previous years.
However, the spill rate of the company in the last three years was still
lower than the average spill rate of the International Association of
Oil and Gas Producers (OGP).

PTTEP is committed to its SSHE policy to conduct its activities without
negative impact on personnel, properties of the company and its
contractors. In addition, PTTEP’s Lost Time Injury Frequency Rate (The
number of Lost Time Injuries per 1,000,000 hours worked) the figures for
the years 2006, 2007 and 2008 were 0.32, 0.32 and 1.24 respectively. The
figure for 2008 being higher than those of the previous years since
PTTEP had more drilling activities at its domestic and international
assets.

In response to the rapid growth of investment, and operations of PTTEP
during recent years, PTTEP is updating their SSHE documents and
documentation system to standardize references and guidelines relating
to SSHE management. Once these documents are updated, new and existing
assets will be able to develop or update their own documents,
referencing the new standards.

To emphasize the awareness and accountability of operations in all
levels, PTTEP has planned for more management visits to both domestic
and international operations in 2009.

Additionally, as part of its commitment to protect the environment,
PTTEP has increased its spending on environmental improvement programs
by 78.7, 98.0 and 141.7 million Baht in the years 2006, 2007 and 2008
respectively.

With regard to sustainable development, PTTEP is one of the companies
under consideration for the potential project of Green House Gas
reduction. Although it is not mandatory for Thailand to reduce green
house gases, according to the Kyoto Protocol, under United Nations
Framework Convention on Climate Change (UNFCCC), PTTEP is voluntarily
encouraging green house gas emission reduction in its operations through
both a Clean Development Mechanism (CDM) and the search for
opportunities in other economical projects.

PTTEP S1 Asset, in cooperation with the Department of Mineral Fuels
(DMF) jointly initiated
a project to supply the community with natural gas from Nongtum A
Station, instead of using LPG.

For this project, flare gas was piped through a gas line from the
location to the newly built Nong Tum Agricultural Product Center. The
notable products of this center are fried fruit and vegetable products
such as banana, pumpkin and taro etc. The project was completed in
October 2008 utilizing approximately 0.04 MMscfd of gas from the flare.
By using natural gas from the flare, instead of LPG, the project was
able to save the villagers several million Baht per year.

The gas utilization project at “Nongtum A” is a project which
demonstrates PTTEP managing its activities in order to minimize impact
on the environment and on communities, thus maintaining Corporate Social
Responsibility (CSR).

PTTEP’s “Gas Recovery Unit” project was installed to reduce green house
gas emission from Bongkot production facilities. It is expected that the
green house gas reduction will be approximately 250,000 tonnes of carbon
dioxide equivalent/year by this project.

An engineering design study of Greater Bongkot South’s Carbon Capture
and Storage by Clean Development Mechanism (CDM) approach, for
operations in the Bongkot concession area, was also conducted to
identify other potential green house gas reduction projects in the
future.