BIG plans retail LNG entry to supply EEC firms
Sales agreements with 10 plants in place
Bangkok Industrial Gas Co (BIG), Thailand's largest industrial gas producer, is upbeat about its liquefied natural gas (LNG) business after receiving a licence to be an LNG retailer from the Energy Regulatory Commission (ERC) last week.
The company plans to diversify into LNG distribution to tap into rising gas demand from local industrial operators.
Piyabut Charuphen, managing director of BIG, said the company has sales agreements with 10 large plants in heavy industry, such as manufacturers of glass, steel, and food and beverage, with a combined sales volume of 100 tonnes daily.
The plan covers distribution through LNG-fuelled vehicles and replacement tanks of LNG and compressed natural gas (CNG). LNG does not require a gasification process before refilling.
"Retail LNG adds value to our existing gas infrastructure and knowledge, as BIG has three decades of experience in the industrial gas business," Mr Piyabut said.
The company signed a memorandum of understanding with PTT Plc, the national oil and gas conglomerate, for a five-year gas sales agreement. PTT has an LNG receiving terminal in Rayong.
BIG tested and sold LNG as part of a pilot project since PTT's receiving terminal started operation in 2012.
He said the service areas for LNG will be in the government's Eastern Economic Corridor (EEC) scheme, covering Chachoengsao, Chon Buri and Rayong provinces, which have a high density of industrial clusters.
Founded in 1987, BIG is a joint venture between Thai investors (led by Bangkok Bank) and US-based Air Products and Chemicals Inc, a leading industrial gas company with expertise in LNG technology, equipment and services.
Mr Piyabut said the US parent firm can provide a range of products and services for design, construction, startup and operation in the LNG facility.
He said there is plenty of room for LNG-related businesses in Thailand, although gas pipelines have limited physical flexibility to provide services.
"BIG will distribute LNG in trucks," said Mr Piyabut. "LNG services require small capital expenditure because we can use our existing assets such as storage and tanks."
The company prepared a 25-truck fleet with capacity of 20 metric tonnes per truck.
He said many industrial operators are still using bunker oil and cooking gas because they cannot access gas pipelines. Operators demand LNG, which is cleaner and more efficient.
"The heat rate of LNG when used as fuel in a production process averages 50,000 British thermal units [BTU], compared with bunker oil at 20,000 BTU and cooking gas at 40,000 BTU," said Mr Piyabut.
"This means LNG users can save on fuel costs and the waste chilled water produced during the gasification process saves on energy costs for district cooling applications."
He said BIG also offers LNG-related services and solutions to industrial customers and expects LNG distribution to grow 30% annually.
BIG allotted 4 billion baht for industrial gas capacity expansion in the country and a new gas separation plant in Myanmar, a record high budget for the firm, to be spent from 2018-20.
The investment will increase BIG's gas capacity by 33% to 2 million tonnes per year from 1.5 million tonnes, and will be allocated to both existing gas production and new development plants.