May 17, 2014 00:00
By Watcharapong Thongrung
Each energy giant has key resources, expertise; plan in line with govt policy
Ratchaburi Electricity Generating Holding and PTT plan to team up to invest in the energy sector overseas.
According to Ratch chief executive Pongdit Potejana, the two companies have spoken about how they would join forces in future business projects, especially investments in the foreign energy sector.
Ratch is a subsidiary of the Electricity Generating Authority of Thailand (Egat) with more than 14 years of experience in the energy sector. PTT has clearly segregated its business into power generation and liquefied natural gas (LNG).
Both companies would benefit by combining their strengths and expertise in working as a “Team Thailand” to explore joint foreign investment opportunities, especially in neighbouring countries, Pongdit said.
The joint investments would be in accordance with Energy Ministry policy, which wants to see Egat and PTT working together rather than ‘s energy each seeking foreign business alliances that could lead to them competing against each other.
The concept is to let Egat subsidiary Ratch team up with PTT’s subsidiary Global Power Synergy Co, which engages in electricity generation. This should help facilitate foreign investments for both firms, Pongdit said.
Ratch can work with PTT in the sourcing and construction of depots to distribute LNG, since Ratch has a natural-gas-operated power plant of about 6,000 megawatts.
This would give Ratch an alternative source of natural gas (it is currently supplied by Myanmar) if a uniform LNG “pool price” can be established.
Securing business alliances and business expansion upstream is a vital business strategy of Ratch.
Apart from the LNG business, it is also interested in coal. It linked up with Banpu to explore overseas investments in countries with abundant coal resources, such as Australia and Indonesia.
In the next 10 years, Ratch believes the energy business (the upstream of electricity generation) will be worth no less than 10 per cent of its overall business worth. Currently, Ratch has an electricity-generation capacity (as per its shareholding ratio) of about 5,519MW and a production capacity (in the developing and project construction phase) of 1,024MW, for at total generation capacity of 6,543MW.
Ratch hopes to boost that to 9,700MW by 2023.
Most of its future investments will be outside Thailand, especially in Myanmar, which will make up about one-third of its new production capacity.
Other investments (apart from Australia and Laos) will take in Vietnam, the Philippines and Indonesia.