Egat seeking diversification

Egat seeking diversification

Egat is seeking an amendment to run non-power businesses

The Electricity Generating Authority of Thailand (Egat) is seeking a legal amendment be allowed to diversify into other segments that are expected to enhance the potential of its human resources and boost the organisation’s efficiency, says governor Kornsit Pakchotanon.

Egat has requested changes to the Egat Act of 1968 to free up the enterprise to conduct other business.

Mr Kornsit said Egat plans to diversify in order to maximise the use of existing assets such as fibre-optic cables.

In recent years, Egat was approved by the National Energy Policy Council (NEPC) to enter the liquefied natural gas (LNG) business in order to terminate PTT Plc’s decade-long monopoly.

Egat’s business diversification will not have any impact on its wholly-owned subsidiary, Egat International Co, which operates in the overseas market only, he said.

In May last year, NEPC gave permission for Egat to conduct a study on floating storage regasification unit (FSRU) with a storage storing capacity of 5 million tones.

The FSRU development cost is estimated to be at 24.5 billion baht, which is due to start feeding gas to North Bangkok Power Plant and South Bangkok Power Plant in 2024.

During the past several months, Egat has been approached by many sales agents from LNG trading businesses.

Egat has high voltage transmission lines (HVTL) across the nation.

The lines are expected to be upgraded within 4-5 years with fibre-optic cables with the new transmission lines.

With the additional fibre-optic lines, Egat had planned to establish fibre-optic-related businesses and telecommunication business and list them on the Stock Exchange of Thailand in 2005.

The plan was scrapped due to political conflict at the time.

Mr Kornsit said the Egat amendment is expected to pass quite easily because most of the plans rely on existing assets, and some projects need minimal capital expenditures.

In December 2014 Egat and the Provincial Electricity Authority teamed up to secure power supply system through the more efficient optic fibre.

The two bodies aim to work together to develop a telecommunication business.

Experts say if these national electricity utilities teamed up to provide telecommunications, the resulting business will be highly competitive as they already operate fibre-optics, which has lower costs than green field business.

According to Chavalit Punthong, PTT’s chief operation officer infrastructure and sustainability management business, Marubeni and Itochu yesterday won a construction bid for PTT Plc’s gas pipeline network’s fifth phase.

He said the winners will be awarded the project to develop gas pipelines in the eastern region.

He declined to specify the winning bid prices.

However, the average cost to develop the pipeline runs around 96 billion baht.

The new gas pipeline was planned to secure the existing gas supply network to support consumers in the region.

The project is a 550-kilometre long gas pipeline running from east to west, which is due to begin operations in 2020.

Source: http://www.bangkokpost.com/business/news/1179233/egat-seeking-diversification