THAILAND NEEDS LNG

PLATTS - State-owned power utility Electricity Generating Authority of Thailand, or EGAT, has issued a Request for Expression of Interest for importing 800,000-1.5 million mt/year of LNG for four to eight years starting March 2019.

The REOI will be followed by a tender in end-September to early October, making it the power producer's first LNG purchase tender that signals the opening up of the country's gas markets, which have been controlled by state-run oil and gas company PTT.

Thailand has been working to liberalize its natural gas markets and allow third parties to supply gas to end-users through PTT's import infrastructure. This was driven by the need to boost competition and energy security, as domestic gas production has been unable to keep up with demand growth.

EGAT, Thailand's largest power producer, will import the gas at PTT's Map Ta Phut LNG receiving terminal where the utility has acquired access to 1.5 million mt/year of regasification capacity from PTT LNG for a 38-year period from 2019-2056.

EGAT expects to sign the terminal user agreement for third-party access of the 10 million mt/year Map Ta Phut LNG terminal by December 2018, finalize a sale and purchase agreement by February 2019 and receive its first cargo by March 2019.

The power producer, which has an installed generation capacity of over 15 GW as of March 2018, will use the imported gas to feed its gas-fired power plants including 1,220 MW of capacity at South Bangkok, 710 MW at Bang Pakong and 750 MW at Wang Noi.

EGAT expects a significant portion of its gas demand to be met through direct LNG imports instead of having to rely on PTT. However, PTT will have rights to participate in any LNG import tenders issued by EGAT.

Interested suppliers must disclose the sources of the LNG and submit their expression of interest by August 31. The gross heating value of the LNG required by EGAT is estimated at 1,066 Btu/SCF.

Earlier this year, EGAT signed a memorandum of understanding for LNG supplies with Qatargas, the world's biggest LNG exporter, and was in talks with other suppliers as well. But the talks were for its proposed 5 million mt/year floating storage and regasification unit in the Gulf of Thailand which is expected to be operational by 2024.

The FSRU would be linked to Thailand's existing gas pipeline infrastructure.

Thailand imported 3.9 million mt of LNG in 2017, an increase of 35% over the 2.9 million mt it imported in 2016, with S&P Global Platts Analytics forecasting the country's LNG imports to hit 15 million mt/year by 2023.

Thailand's Committee on Energy Policy Administration has approved Map Ta Phut's expansion by another 1.5 million mt/year by 2019, and final investment is pending approval from the National Energy Policy Committee.

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