After five years of uncertainty, the auction of the Bongkot and Erawan gas fields in the Gulf of Thailand is finally scheduled to take place next month as originally planned, says the National Energy Policy Council (NEPC).
The government expects to announce the winners of the auction this December, Energy Minister Siri Jirapongphan told the media after the NEPC meeting Thursday.
The prime minister, along with Mr Siri, said the auction can no longer be put off, as doing so would damage the country's reputation.
An invitation letter for the auction will be released in April, and a bidder pre-qualification process will take place in May. A screening for qualified candidates will be held in June, and a final shortlist will be announced thereafter.
"The government expects to sign a contract next February," Mr Siri said.
He said the winners of this auction must present a production-sharing contract instead of using the current concession model.
Auction applications will be grouped into two categories -- Erawan (G 1/61) and Bongkot (G 2/61) -- rather than the seven current contracts, including Erawan (B 10-13) and Bongkot (B 15-17) that are scheduled to have their concessions end in 2022 and 2023, respectively.
Preliminary terms of reference (ToR) are set for a daily contract minimum of 800 million standard cubic feet per day (MMSCFD) for Erawan and 700 MMSCFD for Bongkot because of the government's gas shortage concerns.
The gas price will be calculated by a formula under the ToR, while the winners will sell to Thailand through PTT Plc, the national oil and gas conglomerate.
"The ToR for this auction should be completed by March and it will be approved at the NEPC meeting on April 23. Then invitation letters will be issued," Mr Siri said.
Gas from the two fields provide a combined 2,200 MMSCFD, or 40% of total gas demand. Chevron is the production operator of Erawan, while PTT Exploration and Production Plc handles Bongkot.
The two major gas resources have formed an economic engine for Thailand, serving as a feedstock source for cooking gas and the petrochemical industry for more than three decades.
All facility bases are in Map Ta Phut, Rayong.
In related news, the NEPC also approved cutting the levy collection for the Energy Conservation Fund (ECF) on petrol and diesel from 25 satang per litre to 10 satang.
The new rate will be effective from mid-2018 until 2020, then it will return to 25 satang.
The cut will cost the ECF 5.35 billion baht annually, but it will not impact the size of the fund, which has cash on hand of 40 billion.
The ECF was set up as a tool for energy conservation and efficiency in 1992. The fund supports energy-related projects in the form of grants, sponsorships, project finance, soft loans and direct subsidies.