SET-listed Electricity Generating Plc (Egco), the country's first independent power producer (IPP), has announced its diversification to liquefied natural gas (LNG) with SK E&S Co, South Korea's utility network service provider.
President Jakgrich Pibulpairoj said the move marks the second stage of a strategic partnership after the Korean company decided to sell some assets to Egco.
The two companies are scheduled to sign an LNG business cooperation agreement in January 2019, but further business plans have not been disclosed.
Earlier, Egco's largest shareholder, the state-run Electricity Generating Authority of Thailand (Egat), was granted a licence to import and trade LNG at a volume of 5 million tonnes per year.
On Aug 20, Egat issued a request for expression of interest to any interested foreign supplier to ship the first lot of LNG, an amount of 800,000 to 1.5 million tonnes, to be stored at the LNG receiving terminal in Map Ta Phut, Rayong.
"Egco will wait for a new auction of the second volume from Egat, and SK E&S has the capability to ship a large volume," said Mr Jakgrich.
In November, Egco announced a 49% acquisition of Paju Energy Service, a subsidiary of SK E&S, to own and operate Paju power plant in Paju, Gyeonggi province, South Korea.
The agreement had an investment value of 26.2 billion baht. The transaction is expected to be completed in January 2019.
The Paju power plant comprises two power generators with 1,823 megawatts (MW) in combined cycle that are fuelled by imported LNG.
The Paju plant commenced operations in February 2017 and supplies electricity to Korea Electric Power Corporation, the sole offtaker of wholesale power generation in South Korea.
Egco tried to diversify to the LNG business in 2016, but related regulations and local demand were still being developed.
In March 2016, Egco joined with Egat Inter Co, wholly owned by Egat and Ratchaburi Electricity Generating Holding Plc, an Egat subsidiary, to launch the LNG business in Thailand, but progress was slow.
In a related development, Mr Jakgrich said Egco allocated a 2019 budget of 17 billion baht to develop four new power plants in which it is a shareholder.
The budget includes two hydropower plants in Laos -- the 1,285MW Xayaburi hydroelectric power plant and the 650MW Nam Theun 1.
The other two plants are the 455MW coal-fired power plant in San Buenaventura in the Philippines, and the 1,823MW gas-fired Paju power plant in South Korea.
Egco operates 26 power plants with total capacity of 4,260MW.
In early 2019, the capacity is projected to increase to 5,153MW after completing the transaction for the Paju power plant.
