B.Grimm Power Plc (BGRIM) has become the first private company to procure liquefied natural gas (LNG) for Thailand, following an agreement with national oil and gas conglomerate PTT Plc to use its LNG receiving and regasification facility in Rayong.
B.Grimm LNG, a subsidiary wholly owned by BGRIM, on Tuesday signed the agreement with PTT LNG, which operates the LNG terminal in the Map Ta Phut area.
The move marked an important step forward in liberalising natural gas trade in Thailand, said Harald Link, president of BGRIM.
Now B.Grimm LNG is ready to procure LNG for the country, he said.
In 2020, the company was authorised by the Energy Regulatory Commission (ERC) to be one of seven importers of LNG. LNG shipping was previously monopolised by PTT.
After being granted the shipping licences, B.Grimm LNG negotiated LNG purchase contracts with the world's leading suppliers.
In 2020, the company was first allowed to import 650,000 tonnes of LNG per year to feed gas to power plants under the small power producer (SPP) scheme.
SPP plants sell some electricity to the state grid, while the remainder can be sold to private buyers under private power purchase agreements.
In June last year, B.Grimm LNG was awarded another licence to import 550,000 tonnes of LNG a year to supply gas to 18 BGRIM-owned power plants.
As for the quota of 650,000 tonnes, the company plans to use it to serve new customers in the future.
On Oct 20 last year, it sought the services of the LNG terminal, known as LMPT-1, to process 500,000 tonnes of LNG annually for seven years, from 2023 to 2029.
LMPT-1, with a storage capacity of 11.5 million tonnes a year, provides LNG-related facilities to LNG shippers.
The first commercial shipment of LNG procured by B.Grimm LNG is expected to arrive at the LMPT-1 terminal by early 2023 and kick off the phase-2 free competition in natural gas business, according to BGRIM.
The second phase is meant to allow for free LNG trade in the region, following a first phase focused on gas supply for national energy security.
The LNG procured by B.Grimm LNG will go through the regasification process at LMPT-1 terminal to convert the gas liquid into the gaseous state before being fed into PTT's natural gas pipeline system for delivery to end-users such as power plants and various industries.
PTT is building a second LNG terminal in Nong Fab in Rayong. The new facility, designed to have a capacity of 7.5 million tonnes, is scheduled to start operations in the middle of this year.