Eppo urges delay in LNG imports by power firms

Eppo urges delay in LNG imports by power firms

The import of liquefied natural gas (LNG) by energy companies needs to be delayed because of low domestic demand caused by the pandemic, says the Energy Policy and Planning Office (Eppo).

Gulf Energy Development Plc, B.Grimm Power Plc and Hin Kong Power Co have been granted LNG shipping licences but still need approval for their first gas shipments.

Only the Electricity Generating Authority of Thailand (Egat) was allowed to import 130,000 tonnes between last December and April.

Egat was the second organisation to receive a licence, following national oil and gas firm PTT Plc, under a state policy to liberalise LNG business to serve growing demand for the gas.

Gas demand has continued to fall during the pandemic, Eppo director-general Wattanapong Kurovat said yesterday.

Thailand currently depends on gas supply from domestic sources, imports from Myanmar and some shipments under long-term purchase contracts with other countries.

According to Mr Wattanapong, demand for gas is getting lower and has almost reached the guaranteed level of minimum purchase under the take-or-pay agreement.

This makes it unnecessary to import additional LNG from the spot market, he said.

The LNG price in the spot market increased three times to US$6.6 per million British thermal units, up from $2 million BTU during the second quarter, Mr Wattanapong said.

The need for LNG for purposes such as keeping houses and workplaces warm is behind the increase.

Eppo reported on the situation, which could affect the economic outlook, to economic ministers yesterday.

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