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Thailand aims to set up the framework to become an LNG hub

12 Feb 2020

The Ministry of Energy of Thailand aims to turn the country into an LNG free-trade hub, offering an improved access to the LNG import and export market under the third-party access (TPA) concept. The Ministy is working on a gas market model and investment framework to create such an LNG hub, in a context of depleting domestic gas production and of rising gas-fired power generation.

PTT has been the sole LNG operator since 2011 and operates the 11.5 Mt/year Map Ta Phut LNG import terminal; the group is also developing a 7.5 Mt/year import terminal in Rayong, that will raise its regasification capacity to 19 Mt/year. The Energy Regulatory Commission (ERC), which licenses LNG trading, will invite PTT to discuss the conditions and business model to create an LNG trade hub. The state-owned Electricity Generating Authority of Thailand (EGAT) was granted an LNG shipper licence in 2018 and selected Petronas to supply Malaysian LNG in 2019 (deal suspended since then, as the Ministry of Energy promotes LNG purchases from spot markets rather than binding long-term purchase agreements).

Four companies are applying for LNG shipper licences. Ratch Group aims to import LNG for its 1,400 MW Hin Kong gas-fired power plant in Ratchaburi, that should be commissioned in 2024-2025, while B.Grimm Power aims to feed seven small-scale power plants (140 MW each) with imported LNG, to benefit from cheaper prices. Gulf Energy Development expects to secure a shipping licence and rights to use the Map Ta Phut terminal, while LPG distributor Siam Gas and Petrochemical plans to develop an LNG storage project in Sri Racha district.

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