TEPCO joins forces with Thai utility to procure LNG

 

We analyse the implications of EGAT's agreement to import LNG for power generation in Thailand.

On 21 May 2015, the Electricity Generating Authority of Thailand (EGAT) and the Tokyo Electric Power Company (TEPCO) announced a cooperation agreement indicating their intention to introduce competition into Thailand's gas market. 

It covers the procurement, transportation and supply of LNG for power generation and follows the decision made by the Energy Regulatory Commission to issue third party access codes for the country's only LNG terminal at Map Ta Phut.  

Thailand LNG Demand

With gas production in decline, the opportunity is significant. To date, state-owned oil and gas company PTT has only signed one long-term contract of 2 mmtpa from Qatargas and further volumes are still required. We forecast 6 mmtpa of uncontracted demand in 2020 and 15 mmtpa by 2025.

The memorandum is the first concrete step by EGAT towards directly procuring and importing LNG which will challenge PTT's monopoly in Thailand.  EGAT has the potential to become a significant importer given its 7.6 GW of gas-fired power generation, accounting for approximately 20% of Thai demand.

For TEPCO, the agreement marks and expansion of its overseas operations. This comes as part of a more general trend by Japanese utilities to diversify overseas in the face of gas and power market liberalisation in their home market. 

Read more
EGAT and TEPCO announce LNG cooperation agreement [Subscription required] 

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