EGAT to establish subsidiary for electricity, LNG trading

[webfact]

EGAT to establish subsidiary for electricity, LNG trading

 

By THE NATION

 

Sotirat

 

The Electricity Generating Authority of Thailand (EGAT) has invited interested parties to register as LNG importers on a spot basis for140,000 tonnes, Energy Minister Sontirat Sontijirawong announced Tuesday (October 8).

 

“So far, 40 parties have registered and we expect to start testing PTT’s infrastructure system (warehouses and pipelines) under Third Party Access (TPA) contracts in November,” he said.

 

Sotirat also revealed that he will nominate Energy Ministry Director-General Kulit Sombatsiri for the position as president of EGAT’s board to the Cabinet next week.

 

For his part, Kulit said that once he assumed the post, he would place emphasis on considering and approving a range of issues including the import of LNG for floating storage and regasification units (FSRU), the installation of 2,725 megawatts of floating solar cells at dams, and projects to increase EGAT’s revenue in both short and long terms. “We are now studying the possibility of establishing a subsidiary company to be responsible for electricity trading in Asean,” he said.

 

Kulit further explained that this subsidiary would act as a middleman, buying electricity from one country and selling it to another for profit, as well as buying electricity from community power plants springing up throughout Thailand.

 

“In the long term, EGAT will probably appoint an LNG trading subsidiary to sell excess imported LNG,” he said. “However, this will require amending the EGAT Act B.E. 2511 (1968) that dictates that EGAT can only import LNG for power generation and which states that excess LNG cannot be sold for profit.”

 

Source: https://www.nationthailand.com/news/30377216

 

-- © Copyright The Nation Thailand 2019-10-09

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[Srikcir]

23 hours ago, webfact said:

this subsidiary would act as a middleman, buying electricity from one country and selling it to another for profit

I don't understand how this can work in the long term with Thailand now being an LNG and energy importer. And will be so according to EGAT's updated 2018 Power Development Plan through 2036.

Why would a country pay Thailand an energy profit margin to buy for what itself can do?

Creation of this energy trading subsidiary seems premature at best and (given Thailand's history of government corruption) a potential vehicle for criminal fraud & conspiracy at worst. Would the subsidiary become a Thai-styled Enron?

I presume the NLA must provide budget for this subsidiary to form and operate. As such it must fully investigate the subsidiary structure, management, trading mechanisms and necessary checks and balances to assure the subsidiary not only will succeed its purpose to generate income for the State but that it does so legally.