Thursday, August 13, 2020

Natural gas business restructuring plan set to be submitted for approval

Jul 14. 2020
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By THE NATION

The Energy Policy and Planning Office (EPPO) has finished drawing up a plan to restructure the natural gas business and will soon present it for approval to the Energy Regulatory Commission (ERC), which is chaired by Energy Minister Sonthirat Sonthijirawong, an Energy Ministry news source said.

The source said the EPPO has proposed two approaches in restructuring the natural gas business, with the first being open, free competition.

“This approach will be implemented in three stages. The first is to have the Electricity Generating Authority of Thailand [Egat] import 130,000 tonnes of natural gas to fuel three domestic power plants. The second stage will see the ministry considering issuing import permits to the private sector. The third stage is to gradually let approved private companies import natural gas from neighboring countries in place of Egat,” the source said.

As for the second approach, PTT will be the sole importer of natural gas under the Enhanced Single-Buyer model, which is similar to the electricity business whereas Egat is the single buyer.

“However, the ministry will allow certified private contractors to source and organise bidding for new natural gas shippers who offer the best prices to sell to PTT,” the source said.

The EPPO expects that after the ERC approves the plan, it will present this to the Cabinet for final approval, which should take no more than a few months.

“No matter which approach the ERC chooses, the formula to calculate the natural gas price will be readjusted to ensure fairness to all parties,” the source said.

The source added that three private companies were approved to import liquefied natural gas (LNG) for industrial use by the end of 2020, which are excluded from the cost of electricity generation for domestic use. These companies are Gulf Energy Development and BGrimm Power, which supply LNG to customers in industrial estates, and Hin Kong Power, which supplies to Hin Kong Power Plant that has a power purchase agreement with the government.

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