The Energy Regulatory Commission (ERC) is considering allowing holders of liquefied natural gas (LNG) shipping licences to buy gas under middle-term contracts in a bid to prevent higher power bills.
Shippers have been granted permission to import LNG from the spot market, but high fluctuations of LNG prices in the spot market since early this year have raised concerns over an increase in the fuel tariff, which is used to calculate electricity bills.
Khomgrich Tantravanich, secretary-general of the ERC, said easing conditions on LNG shipping may be enforced next year, but it will only apply to gas imports as a fuel for electricity generation.
The middle-term contract refers to a period of between three to five years.
Mr Khomgrich said LNG prices in the spot market are currently higher than those under long-term gas purchase contracts and gas prices in the Gulf of Thailand.
Last week, spot prices of LNG in Asia surged by 40% to a record high of over US$56 per million British thermal units (MMBTU) on Wednesday amid a global energy crunch and low gas inventories.
S&P Global Platts' Japan-Korea-Marker (JKM), which is used as a spot benchmark in the region, climbed to $56.326 per MMBTU on Wednesday for cargo delivered into North Asia in November, recording the highest one-day rise of $16.65 from Tuesday, according to PTT Plc's gas report.
Mr Khomgrich said the Erawan gas block conflict in the Gulf of Thailand is also causing concern over prices.
An unsettled dispute between the Department of Mineral Fuels and US-based Chevron Corp, whose concession to operate the gas field will expire next year, has caused a delay in accessing the area by its successor PTT Exploration and Production Plc (PTTEP) to prepare for gas production.
The delay will cause PTTEP to solve the problem by importing LNG from the spot market from March 2022.
Mr Khomgrich said the ERC is also trying to curb the increase in electricity bills by better managing fuel costs and capital expenditures of state-run power companies.
Global oil and gas prices are expected to remain high this week, in the range of $76-85 per barrel, in response to a decline in Covid-19 infections in many regions and a rise in the number of vaccinated people, according to Thai Oil Plc.
