Thailand: Egat seeking diversification

Thailand: Egat seeking diversification

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.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1179233/egat-seeking-diversificatio
n

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com