The state-run Electricity Generating Authority of Thailand (Egat) is preparing to develop the country's first floating storage regasification unit (FSRU) worth 24.5 billion baht to support its business plan to import liquefied natural gas (LNG) from 2020.
The National Energy Policy Council approved Egat developing this massive investment project in 2017.
Egat aims to be an LNG shipper for power generation as the government plans to liberalise the business. PTT Plc has been the sole LNG shipper for more than 30 years.
Nibong Ungkurapinan, head of Egat's civil and coastal engineering department, said the 24.5-billion-baht value is a preliminary estimate.
The FSRU will be located in a 20-kilometre offshore area in the Gulf of Thailand.
The unit will be 38km from a gas pipeline to Egat's South Bangkok Power Plant in Samut Prakan.
The FSRU is an enormous barge designed to process LNG, which is then fed to the onshore power plant through a gas pipeline. The regasification process will be done offshore.
"Egat decided on offshore instead of onshore because the former requires less land, less time for development and has less impact on surrounding communities," Mr Nibong said.
An environmental impact assessment report is being considered by the government. Egat expects approval by the first quarter of 2020.
In addition, Egat is preparing international bidding documents for front-end engineering design, then sending invitation cards to shipbuilders in the first quarter of 2020.
He said Egat plans to submit the project's documents to the cabinet for acknowledgement and approval in the second quarter of 2020.
"The FSRU is expected to begin operation in 2024 with a capacity of 5 million tonnes per year for LNG," said Mr Nibong.
He said there were 30 FSRU locations worldwide as of 2017. Egat projects the facilities to rise to 45 locations in 2020.
Once the FSRU starts operation, Egat will spin off its LNG business unit, including the FSRU, to be managed by a new subsidiary to give this business more flexible operation and management.
Kulit Sombatsiri, chairman of Egat's board of directors, said Egat needs to be restructured to cope with disruptive technology in the power sector.
Mr Kulit is also permanent secretary of the Energy Ministry. He was installed as chairman of Egat in October.
"I met with all the important Egat stakeholders to seek the best solution before starting the restructuring plan," said Mr Kulit.
"Traditional power generation will be disrupted faster than expected because of the rapid growth of renewable energy, while the power sector will change from peer-to-peer trade, smart grids and blockchain, which have lower distribution costs."
He said Egat is not a state enterprise, but needs to be engaged with Thai society.
The state power grid should also not be disrupted, said Mr Kulit.
"The roll-out of 5G in 2020 will bring faster changes to many industrial sectors, including power generation," he said.