SET-listed Ratchaburi Electricity Generating Holding Plc (RATCH) and PTT Plc have announced a joint venture to develop power and gas businesses in three countries with a combined investment of US$2.85 billion over the next five years.
Ratch is Thailand's biggest private power producer, while PTT is the national oil and gas conglomerate.
The two energy giants signed three memoranda of understanding (MoUs) yesterday in Bangkok to develop four projects in Myanmar, Vietnam and Indonesia.
Two of the projects are ready for construction, while the other two still need licences from the various governments.
The MoU signing ceremony was presided over by Energy Minister Narongchai Akrasanee.
He called the business integration a good model for securing energy resources for Thailand and its neighbours.
Ratch chief executive Pongdith Potchana said his company would halt expansion of power-generating capacity at home for the next 5-10 years, citing project delays.
Moreover, the Electricity Generating Authority of Thailand earlier announced it would not open new large power projects to private companies.
The first priority project for Ratch and PTT is a $400-million floating storage and regasification unit (FSRU) in which Ratch would own 30% and PTT and local businesses 70%.
The FSRU will sit offshore of Myanmar and connect with an existing gas pipeline that feeds into Thailand.
The project, already approved by Myanmar's government and ready to start construction shortly, is scheduled to begin operating within two years.
The FSRU is meant to secure gas supply in western Thailand, especially during the disruptions that have been frequent occurrences over the past three years.
The second project is a 600-megawatt coal-fired power plant in Kengtung, Myanmar worth $1.3 billion.
The plant has been approved by the government and is in the early stages of preparing environmental management and engineering design.
Construction of the plant is expected to start by mid-2016 and take three years.
Most of the power generated by the plant will be sold to Thailand via a high-voltage transmission line to Chiang Rai province.
In the power plant project, Ratch will hold 50%, PTT 40% and local businesses 10%.
The third project is utility services for a refinery and petrochemical complex in Vietnam's south-central coastal province of Binh Dinh, in which PTT will partner with Saudi Aramco in running the project.
The utility services include power plant, steam and waste management and will be worth about $1 billion.
For the utility services, PTT will own 70% and Ratch 30%.
The fourth and final project is a joint bid on a licence to serve as an independent power producer of 300 MW of electricity for Indonesia's Sum Sel development, a venture worth $150 million.
RATCH shares closed yesterday on the SET at 57.75 baht, up 1.25 baht, in trade worth 18.3 million baht.
PTT shares closed at 362 baht, up five baht, in heavy trade worth 1.22 billion baht.