Thailand to relax gas import restrictions

Out-Law News | 17 Aug 2021 | 12:41 am | 1 min. read

Thailand’s energy regulatory the Energy Regulatory Commission (ERC) will relax restrictions on the independent importing of liquefied natural gas (LNG), ending national oil and gas conglomerate PTT’s control of much of the market.

PTT had largely monopolised LNG import since 2011. Seven other companies were given LNG shipper licences but they were only allowed to sell to companies which did not already have long-term purchase agreements with PTT.

The long-term purchase is based on take-or-pay contracts which commit buyers to paying for the fixed amount of gas though their usage may be lower than the amount stated in the contracts, according to a local report.

The seven companies will be allowed to import 0.48 million tonnes of LNG this year, 1.74 million tonnes in 2022 and 3.02 million tonnes in 2023. Then they will be permitted to import LNG via long-term purchase contacts and will be able to re-export gas.

The seven licence holders include the Electricity Generating Authority of Thailand (EGAT), which started a contract in 2019 importing 1.5 million tonnes of LNG per year for 38 years to supply EGAT South Bangkok power plant, Bang Pakong power plant and Wang Noi power plant.

Electricity Generating Public Co (EGCO) got its licence in July. It is allowed to import 200,380 metric tonnes (220,881 tonnes) each year to supply Banpong power plant, Klongluang plant and Cogen Replacement plant.

Gulf Energy Development got its shipper licence in May 2020 and was permitted to import 1.7 million tonnes of LNG each year to supply 19 of its small power projects. Gulf’s subsidiary Hin Kong Power Holding (HKH) was granted a licence to ship 1.4m tonnes per year which to be used as a fuel for electricity production for Hin Kong power project with capacity of 1.4 gigawatts (GW).

B.Grimm Power Plc was awarded the licence in the same month and plans to fuel five gas fired small power producer plants. PTT’ subsidiary Global LNG Co and Siam Cement Group got LNG shipper licences in July.

Thailand plans to have 53% of its total capacity of 77GW coming from natural gas sources by 2037.