Defence Minister Sutin Klungsang is looking to finalise talks this month with China on the government's plan to procure alternative ships instead of a submarine.
This follows Mr Sutin's visit to China last week to initiate talks on the swap plan.
Mr Sutin said China was open to the Thai proposal to procure either two offshore patrol vessels (OPVs) or a frigate instead of the S26T Yuan-class submarine after the Chinese were unable to meet an engine requirement for the sub.
The navy had intended to install a German-made engine in the submarine, but the plan needed revision after Germany refused to have its engines fitted with Chinese military hardware. Beijing proposed a Chinese-made engine as an alternative, but it did not materialise.
Mr Sutin, known to favour shelving the submarine project and buying another frigate instead, said both sides held their first discussion after last week's visit on Monday via video call.
He said a final agreement was unlikely to be reached over a single discussion but expressed confidence that the talks would be finalised within this month. After that, the new deal would be submitted to the cabinet for approval, tentatively within this month as well, he said.
Mr Sutin said he laid out a number of proposals during the meeting in China with three issues in mind -- the navy's needs, the country's interests and the more than 7 billion baht paid for the submarine not going to waste.
The Thai delegation conveyed to China the Thai public's concerns about the quality of the Chinese-made engine because it had never been used before. But he also expressed sympathy to China about the change because the submarine building had already proceeded with reports saying it was 50% built.
While China was open to the swap proposal, it insisted the exact prices and models of the frigate and OPVs would have to be discussed, he said, noting the issue was unlikely to negatively impact bilateral relations as long as the proposal was reasonable.
Mr Sutin was not concerned about the prospect of being investigated by the National Anti-Corruption Commission for making the change to the submarine deal. He said the change would be approved by the cabinet, which would ensure that its decision was lawful and in the country's best interests.