State-run Electricity Generating Authority of Thailand (Egat) is to hold an auction between April and June this year to find a supplier for imported liquefied natural gas (LNG).
Tawatchai Jakpaisal, deputy governor for the fuel sector at Egat, said registrants who qualify for the auction are expected to submit documents by April 18 and by the end of April a shortlist will be announced.
In early May, the Egat board and the cabinet are expected to approve the auction process.
In June, a final winner will be announced and will sign a purchase contract. The first shipment of LNG is expected in September at the receiving terminal owned and operated by national oil and gas conglomerate PTT. The terminal in Rayong's Map Ta Phut has a capacity of 10 million tonnes.
Mr Tawatchai said LNG volume for the first year is expected at 280,000 tonnes, followed by 1.5 million tonnes in 2020.
Egat already received approval from PTT LNG to import 1.5 million tonnes of LNG a year for 38 years. The contract will start on January 2019 and end in 2056, supplying Egat's South Bangkok Power Plant, Bang Pakong Power Plant and Wang Noi Power Plant.
The National Energy Policy Council (NEPC) approved Egat distributing LNG via a pilot project to assess pipeline market liberalisation under a Third Parties' Access (TPA) regime to deregulate the sector.
Egat needs to manage all processes regarding LNG, starting with decisions regarding imported amount, import process, terminal use and Egat's power plants fuelled by LNG. This is Egat's first involvement in supplying LNG.
Egat is working with a consultant to study sources that are best suited for import based on pricing, security, flexibility and risk management. Egat will not solely depend on a single LNG source.
For the pilot project, the Energy Policy and Planning Office proposed two main shippers to the NEPC -- PTT and Egat -- for importing LNG and testing the TPA system.
Egat has to separate the LNG supply unit from the generation unit. When the TPA system is stable in terms of both control and operation, it will enter the second phase, which will be more liberalised.
My Tawatchai said imported LNG costs more than natural gas from the Gulf of Thailand, but the gas is depleted and a replacement is necessary.
Egat needs a strategy to import LNG from sources with competitive prices to hold down power costs, he said.
As LNG imports are essential to Egat's new mission to enter a complex and fluctuating international market, Egat must develop human resources familiar with the LNG market.
"This is the challenging mission, one where Egat is committed to achieving support from all sectors required," Mr Tawatchai said.