Thailand’s Energy Regulatory Commission (ERC) has issued the Notification on the Criteria for Regulating the Licensed Pool Manager B.E. 2566 (2023), which took effect on November 30, 2023. It followed an earlier notification, which took effect on October 13, 2023, that added the new license for the country’s pool gas manager. The new notification aims to regulate natural gas sale agreements and promote competition among players in the regulated natural gas market—that is, those who utilize natural gas for electricity generation under the Electricity Generating Authority of Thailand (EGAT) scheme, including industrial and NGV (natural gas for vehicles) consumers who rely on natural pool gas.
The establishment of the pool gas scheme is aimed at encouraging new shippers to enter the market and providing new natural gas shippers with fair opportunities to compete with existing shippers, as all licensed shippers in the regulated market are subject to the same natural gas costs under this new scheme.
Under this pool gas scheme, the pool manager plays a critical part in reselling natural gas in the country. Some of its responsibilities include the following:
- Purchasing natural gas or liquid natural gas (LNG) from licensed shippers in the regulated market at the rate at which the shippers procured the natural gas, including incidental expenses such as pipeline transportation and LNG station fees;
- Collecting data on the quantity and price of the gas purchased from the licensed shippers and calculating the pool gas price as specified in the ERC-approved manual, which is basically the average price of the natural gas procurement cost of all shippers in the pool; and
- Reselling natural gas or LNG to licensed shippers at the pool gas pricing rate in the quantity distributed to the pool by each shipper.
Apart from its function in facilitating the primary procedures of the pool gas scheme, the pool manager is responsible for preparing the standard natural gas sale agreement to be used by all licensed shippers in the regulated market.
The ERC is in the process of establishing an independent agent to act as the licensed pool manager. In the interim, PTT Public Company Limited is acting as the licensed pool manager, with a ring-fenced department handling the pool-managing duties.
Given the significance of the pool manager, PTT’s appointment as interim pool manager and the future establishment of an independent agent are important developments for the industry. The increase in competition in the natural gas market that is expected to follow the establishment of the new pool gas scheme will also need to be watched closely.
For further information, please contact:
Supasit Boonsanong, Partner, Tilleke & Gibbins
supasit.b@tilleke.com
