Gulf Energy Plc, Thailand's top private power producer by capacity, is staking its future on liquefied natural gas (LNG) trading in anticipation that the state will open trading to the private sector this year, a decision that was delayed because of the coronavirus crisis.
The majority of Gulf's 14 power plants in Thailand are powered by PTT's gas separation plant. Gulf already set up a wholly owned subsidiary, Gulf LNG Co, as an LNG shipping business.
The company plans to further vertically integrate its business, already heavily reliant on fossil fuels.
But it must wait for a decision on the matter from the Energy Regulatory Commission, then apply and be granted a licence before it can begin trading natural gas.
Currently LNG trading in Thailand is controlled by national oil and gas conglomerate PTT Plc, despite calls for the government to liberalise the sector.
Gulf is also committed to developing two more independent gas-fired power plants in Ratchaburi province and in southern Vietnam.
One of the plants is slated to be built in Hin Kong, Ratchaburi province, where Gulf has a 49% joint venture with Ratch Group Plc called Hin Kong Power Co that was granted a licence to develop and operate a 1,400-megawatt gas-fired power plant.
This new plant is estimated to cost US$700 million (21.7 billion baht), and its licence is a 20-year renewal of a previous concession that expired last year.
After this power plant renewed its concession, Ratch renamed it from a retired concession under Tri Energy Co to Hin Kong Power.
Under the renewed licence, Ratch entered a 25-year power purchase agreement with the Electricity Generating Authority of Thailand, which owns a 45% stake in Ratch.
Hin Kong is still in the approval process, contingent on an environmental impact assessment from the Office of Natural Resources, Environment Policy and Planning.
Yupapin Wangviwat, chief financial officer of Gulf, said some time this year Hin Kong Power will open a bid for an engineering procurement and construction firm to begin development planned for early next year.
The firm expects the plant to commence operations in 2024 for its first phase and the following year for the second.
The second plant in Gulf's development pipeline is another LNG-powered plant to be built in Vietnam's Ninh Thuan province.
Last November, Gulf signed a memorandum of understanding with the local government of Ninh Thuan to initiate and prepare construction of the 6,000MW-capacity plant.
The project designs include a fully equipped LNG processing and distribution station to support economic and urban expansion in southeastern Vietnam. The $8-billion project includes a 6,000MW combined-cycle gas power station and an adjacent LNG regasification facility terminal.