Egat pivots to 2 spot market LNG buys

Egat pivots to 2 spot market LNG buys

The state-run Electricity Generating Authority of Thailand (Egat) plans to purchase 140,000 tonnes of liquefied natural gas (LNG) in spot markets for two shipments, intended for Egat's gas-fired power plants in the remaining months of 2019.

Egat has invited 40 LNG makers and traders in the spot markets to the auction.

"All 40 companies are going to be qualified for this auction and the shortlist will be announced by October," said Kulit Sombatsiri, permanent energy secretary.

"Egat's board of directors will screen and select the winning bidders in November."

Mr Kulit said Egat plans to purchase two shipments of 70,000 tonnes each, expected for delivery by December.

The plan follows the government cancellation of an eight-year LNG purchase agreement from Petronas for 1.5 million tonnes.

"The two new shipments are a small volume, so they will not affect the PTT's shipment and storage," he said.

"New shipments will be regasified for power generation within 20 days."

Mr Kulit is being appointed as chairman of the board for Egat by Energy Minister Sontirat Sontijirawong. The cabinet is scheduled to approve Mr Kulit's new duty on Oct 15.

Mr Kulit said Egat should spin off two business units -- LNG imports and power trade -- to be wholly owned companies because both have growth potential.

He plans to revise the Egat Act of 1968 to allow Egat to re-export and sell LNG. The law allows Egat only to import to feed gas-fired power plants.

"The new shipments of 140,000 tonnes is a test for Egat's LNG business and the law will be amended in 2020 to allow Egat to trade LNG," said Mr Kulit.

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