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Back in the 1980s, I was Vice President of Sales for a major supplier of semiconductor test equipment. As part of my duties, I found myself making frequent trips to Asia. Some of my largest customers were just starting to open manufacturing facilities there.

One of the most interesting places I visited was Thailand. At the time I visited, the air quality was poor, and that was on a good day. The cars, trucks and buses all burned leaded gasoline and high-sulfur diesel.

Every morning, the hotel maid had to wipe off the outside veranda tile. It was covered with soot and pollutants from the air.

Economic Strides

The country has made some great strides since then, and is now emerging as one of Asia’s economic powerhouses. Thailand’s economy is now the world’s twenty-fourth largest, at around $584 billion.

This industrialized nation sports a well-developed infrastructure, a free-enterprise economic structure, and its government is generally pro-investment.

That’s particularly important for foreign companies looking for a place to establish offshore manufacturing.

Thailand’s GDP growth rate averaged about 3.85 percent every year since 1993. In 2010, its GDP grew over eight percent, making it one of the most rapidly growing countries in the region. Its economy is heavily export-dependent, with two-thirds of its GDP coming from exported goods. Automotive parts and electronics constitute a major portion of its exports.

The Platong II Project

All this growth can mean only one thing: Thailand has access to inexpensive energy. There’s a household name that’s front and center in Thailand’s oil and gas industry – Chevron Corporation (NYSE: CVX).

Chevron is responsible for about one-third of all oil and gas production in Thailand, and is its leading producer. It operates over 200 oil and gas production platforms in the Gulf of Thailand.

But its newest platform, the Platong Gas II project, will be the world’s largest offshore production facility. Just two days ago, Chevron announced that the giant platform has commenced production months ahead of schedule.

This offshore monster, located in shallow water 120 miles off the southern coast of Thailand, cost a whopping $3.1 billion to build. It’s one of Southeast Asia’s largest offshore platforms. Chevron is the operator of the platform, and holds a 69.9 percent interest in Platong II.

When fully operational, Platong II is expected to provide Thailand with 330 million cubic feet of natural gas per day, and about 18,000 barrels per day of natural gas liquids. This will contribute to Thailand’s rapidly growing demand for energy, and will increase the country’s net production by more than 10 percent.

Currently, Thailand’s oil imports are growing rapidly, as demand is outstripping the rate of supply expansion. Even with Platong II, Thailand will still have to import natural gas.

Southeast Asia as a whole is one of the most rapidly growing areas in the world, and its energy needs are increasing along with that growth. Investors should look to companies that lead production in the region to take advantage of the trend.

Disclosure: None

Source: Chevron: Fueling Thailand's Rapid Growth