The National Energy Policy Council (NEPC) has given the green light to the import of liquefied natural gas (LNG) by seven firms in a move to promote competition in the LNG market.
LNG imports are set at 0.48 million tonnes in the second half of this year, 1.74 million tonnes next year and 3.02 million tonnes in 2023, said deputy Prime Minister and Energy Minister Supattanapong Punmeechaow, who chaired the NEPC meeting yesterday.
Authorities have granted shipping licences to the seven firms since 2019, enabling them to benefit from LNG trade in the spot market when prices are low.
Thailand needs to import more LNG in order to deal with diminishing natural gas reserves in the country and high power costs, he said.
Imported LNG will feed gas-fired power plants which produce electricity for use and sale among factories.
The seven companies are Electricity Generating Authority of Thailand, B.Grimm Power Plc, Gulf Energy Development Plc, Hinkong Power Co, Electricity Generating Plc, Siam Cement Plc and PTT Global LNG Co.
If LNG prices in the spot market are low, LNG imports can help reduce power production costs, which will be reflected through lower power tariffs, said Mr Supattanapong.
Previously national oil and gas conglomerate PTT Plc monopolised LNG shipping, but under a new LNG business development plan, the government wants to promote competition in the LNG market.
Gas-fired power generation accounts for 55-60% of the country's total power supply, so the move to reform the natural gas market is also crucial for power cost control.
There is currently one LNG receiving terminal run by PTT in Rayong's Map Ta Phut, causing seven LNG importers to pay rent for using it to store their LNG.
Authorities are working to remove unnecessary regulations to make it easier for the companies to use the facility.
PTT is building a second LNG receiving terminal in Nong Fab in the same province.
The 38.5-billion-baht Nong Fab facility began construction in March 2019 and is scheduled to start operation in 2022.
Thailand is expected to import 27 million tonnes of LNG in 2037, an almost sixfold increase from 5 million tonnes last year. Imports will in 2037 make up 70% of total natural gas supply, up from 13% at present.