The state-own Electricity Generating Authority of Thailand (Egat) will have its subsidiary start importing liquefied natural gas (LNG) in order to cut its reliance on the current sole importer PTT Plc.
Pongdith Potejana, the chief executive of Ratchaburi Electricity Generating Holding Plc (Ratch), said senior executives of Egat had approached Ratch to join it in the gas business.
He said they are conducting a feasibility study to develop an LNG depot at its land bank in Prachuap Khiri Khan. If the study finds it viable then the facilities need to be developed immediately as it will take at least seven years to develop.
"Because we foresaw gas in the Gulf of Thailand running dry within 7-10 years while we may not be able to import additional gas from Myanmar in the next decade we have to rely on ourselves," said Mr Pongdith.
Currently, all Egat gas-fired power plants consume gas around 2.3 billion cubic feet per day or 45% of the country’s gas demand.
Therefore, Egat has moved into the business to secure its feedstock.
"Over the next decades we have to rely heavily on LNG even further, as we cannot generate power from other types of fuels," said Mr Pongdith.
In a related development, Ratch's subsidiary, Tri Energy, which is the first private power producer in the country, will need to ask the Energy Regulatory Commission to extend its concession for five years as its 20-year concession for operation is due to expire in 2020.
Ratch has expected to gain sales this year on par with last year or 53 billion baht as its power output rose slightly from 60 megawatts.
Its major new capacity, the 600-MW Hongsa power plant in Laos is expected to start operation in 2015.
Ratch aims to have a combined power output of 9,700 MW in the next 10 years from the current 6,543 MW.
In order to serve the bigger capacity, it plans to increase its market capitalisation to 280 billion baht in 2023 from 116 billion at current.
Ratch’s investment plan will focus on four business segments: primary-fuel power generation, renewable energy, international power projects and business related to power generation.
"According to our business strategy, Ratch will consider greenfield and brownfield investments in the future as well as mergers and acquisitions to optimise steady cash flow of the company," said Mr Pongdith.
He said Ratch had approached the Myanmar government in order to bid for a development concession of gas-fired power plant in Nay Pyi Taw with a capacity at 300 MW and bid for a coal-fired power plant development in Chiang Tung.
Shares of RATCH closed yesterday on the Stock Exchange of Thailand at 49.50 baht, down 50 satang, in trade worth 36.5 million baht.