You are using an outdated browser and your browsing experience will not be optimal. Please update to the latest version of Microsoft Edge, Google Chrome or Mozilla Firefox. Install Microsoft Edge

January 3, 2024

Thailand’s New Pool Gas Scheme

Subscribe to Updates

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 more details on the pool gas scheme, or on any aspect of energy activities in Thailand, please contact Supasit Boonsanong at [email protected], Kobchai Nitungkorn at [email protected], or Thananya Pholchaniko at [email protected].

Related Professionals

Industries

Energy

Location

RELATED INSIGHTS​ 

March 22, 2023
Attorneys from Tilleke & Gibbins have contributed the Cambodia, Laos, Myanmar, and Vietnam sections to DLA Piper’s Global Government Contracting Country by Country guide, which provides essential information for businesses in 75 jurisdictions on how to source and enter into government contracting opportunities. The guide provides procurement information for jurisdictions in Africa, the Americas, Asia-Pacific, Europe, and the Middle East, and includes information on how to find procurement opportunities, the structure of procurement laws, and in-country resources and relevant publications. Each jurisdictional section includes valuable information on procedures for government tenders, bidding, and contract execution, as well as an overview of the legal and regulatory framework governing government procurement. Businesses can refer to the guide to gain a better understanding of procurement processes and regulations in each jurisdiction, which can help them identify potential opportunities and make informed decisions when pursuing government contracts. The guide’s procurement information for Cambodia, Laos, Myanmar, and Vietnam, combined with the online platform’s comprehensive resources, provides businesses and governments with a valuable tool to navigate the complex regulatory landscape of government contracting in the region. The full Global Contracting Country-by-Country guide is available on the DLA Piper website.
Read More
February 20, 2023
On December 20, 2022, the Notification re: Rules, Procedures, and Conditions on Transfer of Energy Licenses of the Thailand Energy Regulatory Commission (ERC) became effective. The notification sets out the new standard and procedure for transferring licenses for energy industry operation. The notable changes in the notification are provided below. Anti-Competition Consideration and Impact Assessment Report In considering the transfer of a license, in addition to ensuring the transferee meets all the qualifications for an applicant for the license, the ERC will consider if the transfer would (1) create a monopoly, reduce or restrict competition, or result in market dominance; (2) affect the contracting parties of the transferors or energy users; or (3) affect energy security or the public interest. In this respect, the vetting process for an application for license transfer would be separated into two different approaches. If the ERC believes that the transfer of the energy license would affect competition, energy users, energy security, or the public interest, the transferor will need to submit an impact assessment report on the license transfer to the ERC. In this regard, the ERC may establish a sub-committee or an independent consultant to contemplate the transfer at the transferor’s expense. However, if the ERC believes that the transfer of license would not lead to any impact, the transferor will not be required to submit the impact assessment. Also, if the license transfer is related to any transactions specified under the ERC’s Regulation re: Rules and Procedures on Merger and Cross-Shareholding in Energy Businesses, B.E. 2565, the ERC can combine the license transfer application with the M&A application. After approval, the ERC might require the transferee to periodically report to the ERC and comply with measures stipulated by the ERC. Therefore, an energy license holder which plans to carry out M&A
Read More
February 3, 2023
The Federation of Thai Industries (FTI) announced on January 16, 2023, the opening of registration for carbon credit trading on its Renewable Energy and Carbon Credit Exchange Platform. This new online platform supports the domestic carbon market and provides Thai exporters with the ability to purchase carbon credits, allowing them to address demands from importing nations to conform to carbon emission reduction regulations. This is expected to be a positive step forward for the current practice in Thailand, in which the carbon market operates as a voluntary and unregulated buy-sell platform, free from government regulation. Developed in partnership with the Thailand Greenhouse Gas Management Organization (TGO), the FTI: CC/RE/REC X Platform, or FTIX, is intended to increase the promotion of national carbon credits, renewable energy, and renewable energy certificates, thus improving the country’s efforts to mitigate climate change. Entrepreneurs interested in registering for carbon credit trading on the FTIX can do so through the FTIX website at fti-cc.com. The platform initially supports carbon credit trading through over-the-counter methods. In the near future, the FTIX will be developed to support 100% renewable energy (i.e., RE100 energy) and renewable energy certificate trading. However, the related tax and carbon pricing policies have not yet been issued. The TGO is currently in discussions with the Fiscal Policy Office and the Ministry of Finance regarding fiscal policy for the FTIX. For more information on the FTIX, or on any aspect of renewable energy activities in Thailand, please contact Charuwan Charoonchitsathian at [email protected], Napassorn Lertussavavivat at [email protected], or Ratchapat Triteeyaputranonta at [email protected].
Read More
January 25, 2023
Thailand’s Energy Regulatory Commission (ERC) has issued four new regulations under the Energy Business Act B.E. 2550 (2007) setting forth competition regimes to control both anticompetitive conduct and market structure in the energy business sector. The regulations were published in the Government Gazette on December 19, 2022, and took effect the following day. The key provisions of these ERC competition regulations largely mirror those articulated in the Trade Competition Act B.E. 2560 (2017) and its subordinate legislation. The most significant features of these competition regulations are summarized below. Market Definition Regulation The ERC’s market definition regulation (officially the ERC Regulation re: Market Definition and Relevant Market of Related Energy Services B.E. 2565) outlines the general framework for defining relevant markets in the energy sector. The factors to be taken into consideration include types of energy licenses, geographical areas, competition conditions, and interchangeability of energy services. In the annex to this regulation, the ERC has classified the relevant energy service markets as follows: Power business activities include power generation, power transmission system services, power distribution system services, power distribution services, and power system control services. Natural gas business activities include natural gas transmission through pipelines via natural gas transmission systems, natural gas procurement and wholesale via natural gas distribution systems, natural gas retail via natural gas distribution systems, and storage and regasification of liquefied natural gas. The ERC will review its market definitions and relevant energy service markets from time to time, taking into account changes in technology and competition conditions as well as feedback from public hearings. Market Dominance Regulation Under the ERC’s market dominance regulation (officially the ERC Regulation re: Criteria on Business Operator having a Market Dominance B.E. 2565), the ERC is empowered to proactively determine and declare which license-holding energy business operators have a dominant position
Read More