Panel suggests easing rules for LNG trade

Panel suggests easing rules for LNG trade

Move aims to create better ecosystem

The National Energy Reform Committee has proposed relevant agencies and companies ease conditions to allow free trade of liquefied natural gas (LNG) and peer-to-peer power trading in the country.

This committee implemented the energy reform plan in September 2018 with an emphasis on deregulating the electricity sector and enhancing competitiveness among private operators in the gas, oil and power sectors.

The new version aims for open and free private participation in the energy sector and deregulation of all aspects over the next two decades, as policymakers deal with disruptive technology.

Yesterday the committee held a public hearing in Bangkok to gather opinions from stakeholders in the energy sector. Many of them said the government should ease some conditions and regulations to attract other companies to enter the energy business.

Kawin Thangsupanich, the committee's secretary-general, said the government allows third parties access to the LNG import business.

Eligible LNG shippers must hold gas sale agreements with off-takers. This condition was initiated in 2015, but the global petroleum market has changed rapidly because LNG prices are more competitive.

"The government should not include this condition because several energy companies are ready to participate as shippers for the LNG market," he said.

"They should have full support from the government to promote Thailand as a hub of LNG trade in this region. A free market will create a better ecosystem in the gas market."

PTT Plc was allowed to be the first LNG shipper by the Energy Regulatory Commission (ERC) in 2011, with Electricity Generating Authority of Thailand (Egat) as the second.

Egat ordered an LNG shipment of 130,000 tonnes, purchased from spot markets in December for a first batch of 65,000 tonnes. Petronas LNG was the supplier. The final shipment is slated for delivery in April.

B.Grimm Power, Gulf Energy Development and Ratch Group have requested LNG shipping licences from the ERC, but the regulator remains silent.

Siam Gas and Petrochemical Plc also plans to request an LNG licence.

"Many Southeast Asian nations have developed LNG receiving terminals, so Thailand should take this opportunity to create a better ecosystem than our neighbours," said Mr Kawin.

He also said the state should relax the legal limits on peer-to-peer power trading and onsite power generation systems because many energy companies are testing this disruptive business.

"Renewable power projects are being tested for peer-to-peer power trade, but the actual transaction is still impractical, so the test only collects data as a possible business model," said Mr Kawin.

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