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Thailand advances LNG bunkering plans ahead of IMO 2020 sulfur cap rule

Singapore — Thailand's Ministry of Transport plans to open LNG stations along the eastern seaboard for vessels using clean energy as the International Maritime Organization's global sulfur limit rule for marine fuels looms, the Bangkok Post reported Sunday.

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The IMO will cap sulfur in marine fuels at 0.5% worldwide from January 1, 2020, compared to 3.5% currently. This applies outside the designated emission control areas where the limit is already 0.1%.

"The future of challenges in the maritime transport industry will no longer be just about safety. The sector will face new challenges on environmental fronts. Yet, vessels are still emitting high levels of sulfur dioxide. The industry must improve now as there is no way to renegotiate [with IMO standard]," Pailin Chuchottaworn, deputy transport minister, was quoted as saying at an industry event in Bangkok.

"We would like to take the opportunity to develop the two seaports in Chon Buri and Rayong provinces ... in line with international practices, ... turning them into LNG stations to fuel vessels," he said.

He called LNG as a viable option to comply with the IMO 2020 rule because of zero sulfur-dioxide emissions and a comparatively low price.

The report quoted a representative from the Pollution Control Department, or PDC, said the subcommittee on marine ecology was also speaking to representatives from marine and oil companies about the development of low-sulfur fuel oil ahead of the IMO sulfur cap for marine fuels.

Thailand is expected to import more than 20 million mt/year of LNG by 2025 and 34 million mt/year by 2036, up from 2.9 million mt in 2016, according to the Energy Policy and Planning Office under the Ministry of Energy.

State-owned PTT currently has term contracts to buy LNG from BP, Shell, Malaysia's Petronas and Qatargas, and it is also active in the spot market.

PTT has doubled the capacity of its first 5 million mt/year LNG import terminal at Map Ta Phut in Rayong, southeast of Bangkok, and is working to raise it to 11.5 million mt/year by 2019. It is also planning a second LNG terminal with a capacity of 5 million-7.5 million mt/year by 2022 and floating storage and regasification units among other projects.

In August, state-owned power utility Electricity Generating Authority of Thailand said that it planned to import 800,000-1.5 million mt/year of LNG for 4-8 years starting March 2019, signaling the opening up of the country's gas markets further.

EGAT is working on its own 5 million mt/year FSRU project in the Gulf of Thailand, which is expected to be operational by 2024.

-- Surabhi Sahu, surabhi.sahu@spglobal.com

-- Eric Yep, eric.yep@spglobal.com

-- Edited by E Shailaja Nair, newsdesk@spglobal.com