Thailand to liberalize onshore natural gas distribution by mid-2014

Construction News

The onshore distribution of natural gas in Thailand will be liberalized by mid-2014, the country’s Energy Regulatory Commission said Friday.

A new regulation being finalized will enable third-party distribution of gas in Thailand, which is currently under the sole distribution of state-controlled PTT, the ERC said.

The ERC is an independent body whose regulations do not require approval from ministries or other authorities before being enacted.

The new regulation will have a direct influence on the distribution of LNG imports, the ERC said, as PTT’s LNG receiving and regasification terminal and 1,437 kilometers (892 miles) of onshore pipelines will be made available to third parties.

Details of how this will be mandated have not yet been finalized. Options under discussion include negotiating with PTT to set prices to access its facilities, or allowing other companies to set up their own distribution networks.

The new regulation will not apply to offshore distribution of natural gas as the ERC is restricted by mandate to onshore activities. This means PTT will retain its effective monopoly of buying from local offshore gas producers and using its 2,198 km (1,365 mile) offshore pipelines for distribution.

PTT has been the sole distributor of offshore gas since its initial investment in subsea pipeline construction in 1981, and while access to its offshore pipelines has not been restricted since 2001, when PTT was partially liberalized, it retains control of all aspects of the network.

Natural gas has accounted for 59.3% of Thailand’s electricity generation in 2013 to date, according to the country’s Energy Policy and Planning Office, with gas consumption averaging 2.7 Bcf/day, up 3.6% year on year.


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