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Implications of declining natural gas reserves
and other key trends on Thailand’s energy future
July 2018 Version 1
RUNNING ON EMPTY
Source: Thailand 2015 power development plan and gas model
-
2,000
4,000
6,000
1986 1991 1996 2001 2006 2011 2016 2021 2026 2031 2036
Domestic MTJDA Myanmar Imported LNG
Thailand Natural Gas Supply by Source
Drastically increased LNG exposure combined with
technology, global energy dynamics, and regulations
bring unprecedented threats and opportunities to the
Thai power sector and its participants
Phase 1 Domestic gas drives industrial growth
Phase 2 Imports offset waning resources
Phase 3 LNG becomes primary source of gas
(mmscfd) Phase 1 Phase 2 Phase 3
Increasing LNG dependency and other factors driving the change
THAI ENERGY SECTOR ENTERING TRANSFORMATIVE PHASE
Will LNG costs drive an RE boom?
What would that look like?
How will the increasing LNG dependency
impact electricity prices?
Can Thailand meet its national energy targets?
What will imported LNG dependency mean?
What are the regulatory issues currently driving
the market? What forces might drive change?
How will this impact the power sector?
What are the implications?
What global forces will impact Thailand?
What impact will technology have?
What would a transformed market mean to
generators?
What segments look to be the most promising?
How might future scenarios unfold?
Areas of inquiry
2
CASCADING IMPACTS WILL AFFECT ALL INDUSTRY PARTICIPANTS
Developers
A new set of preferred technologies, fuel supply options,
development risks, and regulations will determine who
succeeds
Plant
owners
Rapidly evolving energy market dynamics and regulatory
risks may affect plant economics and competitiveness
Gas
suppliers
Growing LNG demand, multiple buyers and opening of
transmission and distribution will offer new opportunities
Investors
The transformation of the energy landscape will create new
risks – and opportunities – for existing and future assets
Lenders
A new set of market & regulatory risks will affect project
bankability and energy sector investment attractiveness
Others
Future regulatory, legal, and operational considerations
could create a myriad of winners and losers
Running on Empty provides insights to players across the value chain
3
RUNNING ON EMPTY: OVERVIEW
Key issues
In-depth examination of 12 key issues crucial to
gas and power sector development
Modeling results
Running on Empty draws heavily on outputs from
proprietary gas and power models
Thailand gas and power industries
Research and analysis of Thai gas and power
sectors, including historical review and summary
of current status
Running on Empty brings together qualitative and quantitative analysis as well as extensive Thai experience of the
study partners AWR Lloyd, Pöyry Energy, and Vector Energy Advisory to provide a comprehensive overview of the
Thai gas and power sectors at this critical time in their development
Introduction and Conclusions
Thailand Energy Industry Overview
Gas Sector
Focus
Power Sector
Focus
Gas Sector
Modeling
Key Issues
in Depth
Power Sector
Modeling
High-level report structure
4
• Natural gas demand
• Piped natural gas supply
• Gas Plan & infrastructure development
• Regulatory overview
• Prices
• LNG dependency and acquisition
• Modeling: Gas supply & demand
TABLE OF CONTENTS
Introduction and Conclusions
Thailand Energy Industry Overview
• Electricity demand
• Electricity supply
• Power Development Plans
• Regulatory overview
• Industry players
• Prices
• Modeling: Electricity scenarios
1. Successful concession extensions
2. Successful exploration awards
3. Reliability of Myanmar gas supply
4. LNG markets and acquisition
5. Ability to reduce gas demand
6. Ability to build out LNG infrastructure
7. Successful transition to gas market structure
8. Ability to manage Thai power demand growth
9. Ability to bring on new RE
10. Ability to bring on new non-RE
11. Sufficient regulatory and market development
12. Successful adoption of new energy technology
36
64
47
80
75
70
87
162
167
163
171
169
173
Slide number and hotlink:
Gas Sector Focus
Key Issues in Depth
Power Sector Focus
100
118
104
138
134
126
143
176
181
178
195
192
197
19
4
100 36
158
#
5
Detailed table of contents available on slides 14-15
6
> Gas sector – Supply & demand
SAMPLE QUESTIONS ADDRESSED IN RUNNING ON EMPTY (1/6)
What are the main factors driving Thai
gas demand? What are the main risks
to the government’s targets?
What is the status and remaining
potential of the existing operating gas
fields?
What are the prospects for new gas
discoveries in Thailand or neighboring
countries ?
Are Thailand's plans for natural gas and
LNG infrastructure development
sufficient to meet projected LNG
demand?
What does growing LNG dependency
mean to Thailand?
Introduction & Conclusions
Thailand Energy Industry
Overview
Gas Sector
Focus
Power Sector
Focus
Gas Sector
Modeling
Key Issues
in Depth
Power Sector
Modeling
Do we want to include
something like this on
each of these slides?
7
> Power sector – Supply
SAMPLE QUESTIONS ADDRESSED IN RUNNING ON EMPTY (2/6)
What are the major trends and drivers impacting the power sector?
What is the outlook for continued RE growth? What are the critical barriers and drivers?
Can Thailand achieve solar PV prices as low as seen in Mexico and Dubai (<$30/MWh)?
How do Solar+Storage economics compare to conventional options such as gas-fired plants?
How will this evolve in the future?
8
> Gas sector – Regulations & industry dynamics
SAMPLE QUESTIONS ADDRESSED IN RUNNING ON EMPTY (3/6)
What is the status of Thai regulatory change and reform? Will these reforms provide
significant new business opportunities?
How will Thailand manage its transition to becoming a major global LNG acquirer?
What are the main risks to increased LNG acquisition to Thailand?
Will specific reform programs such as Third Party Access (TPA) and new LNG buyers
drive change?
9
> Power sector – Regulation & industry dynamics
SAMPLE QUESTIONS ADDRESSED IN RUNNING ON EMPTY (4/6)
What types of forces are currently driving
– or restricting – regulatory change in the
power sector?
What impact does solar PV have on
wholesale rates?
How competitive is rooftop PV compared
to end-use customer tariffs? How will the
(to-be-determined) level of export
compensation affect this?
What types of battery storage value
sources can be "realized" or monetized
in Thailand today, given today's rules and
regulations?
How do Solar+Storage economics
compare to conventional gas-fired
plants? How will this evolve in the future?
How will battery EVs affect Thailand's
power system?
10
> Gas sector – Modeling
SAMPLE QUESTIONS ADDRESSED IN RUNNING ON EMPTY (5/6)
How much could actual LNG imports
vary from the Thai government
forecast? What is the range of
scenarios for LNG requirements?
What are the main drivers of each
scenario and how likely are they to
transpire?
Are the main assumptions of the Thai
Gas Plan realistic?
What are the main risks to LNG import
estimates? How big and likely are
each? What are the cost implications of
LNG imports?
To what extent could increased
domestic or regional exploration reduce
LNG requirements?
11
> Power sector – Modeling
SAMPLE QUESTIONS ADDRESSED IN RUNNING ON EMPTY (6/6)
How will wholesale power tariffs
evolve under a variety of
scenarios?
To what extent will future LNG
prices drive wholesale power
rates?
How will future RE cost and
penetration levels affect future
wholesale rates? Can RE "save the
day"?
How will gas-fired plant dispatch be
impacted by the increasing
penetration of intermittent
renewables?
How will increasing amounts of
renewables – and uncertain LNG
prices – change the relative
dispatch priorities of the various
plants in Thailand's power system?
EXPANDED LIST OF SAMPLE QUESTIONS ADDRESSED IN THE REPORT
12
1. What will drive Thai gas demand?
2. What is the status of the existing operating gas fields?
3. How much gas reserves does Thailand have?
4. What is the status and prospects for ongoing gas concession
extension awards?
5. What will happen with Myanmar gas?
6. What will happen with MTJDA gas?
7. What are the prospects for new exploration in the GOT?
8. How much of a difference could these make?
9. What is the status and expectations for the OCA?
10. What is Thailand's plan for natural gas and LNG infrastructure
development?
11. Is there any risk to this plan?
12. What is the status of Thai regulatory change and reform?
13. What are key laws and institutions?
14. What has been done?
15. What else is being planned or considered?
16. What is the Thai natural gas pricing structure?
17. What are the plans and prospects for reforming it?
18. What will EGAT's entry into the LNG market mean?
19. What does LNG acquisition mean to Thailand?
20. What are the main Thai Gas Plan assumptions?
21. What if everything goes right?
22. What if everything goes wrong?
23. How much does Thai gas demand drive LNG requirements?
24. How much does PNG supply drive LNG requirements?
25. What are the range of scenarios for LNG requirements?
26. What is the current pipeline of utility-scale solar PV projects?
27. What is the current pipeline of utility-scale wind projects?
28. What impact does installed solar PV have on wholesale rates? 29. How will wholesale power tariffs evolve under a variety of scenarios?
30. How will future RE cost and penetration levels affect future wholesale
rates? Can RE "save the day"?
31. To what extent will future LNG prices affect wholesale power rates?
32. When will declining solar PV prices begin to put downward pressure
on wholesale rates?
33. How will gas-fired plant dispatch be affected by increasing penetration
of intermittent renewables?
34. How will increasing amounts of renewables -- and uncertain LNG prices
-- change the relative dispatch priorities of the various plants in
Thailand's power system?
35. What do successful concession extension mean to Thailand?
36. What is the potential impact of a successful E&P program?
37. What are the prospects for future gas supply from Myanmar?
38. What are the risks and impacts from growing LNG dependency?
39. Can Thailand meet national gas demand reduction goals?
40. Can Thailand build out LNG infrastructure as needed?
41. What to expect from Thai gas sector reform plans
42. What factors will lead to -- or restrict -- continued solar PV cost
declines?
43. How does solar PV compare to gas-fired plants, from a levelized cost
("LCOE") perspective? How will this evolve over time?
44. Can Thailand achieve solar prices as low as seen in, for example,
Mexico and Dubai (<$30/MWh)? Why or why not?
45. IRENA asserted that Thailand can achieve 17 GW of solar PV in 2036.
Is this possible? How does that number compare to growth in other
countries?
46. What types of challenges will the increasing amounts of intermittent
renewables put on the electric system, including other plants?
47. How competitive is rooftop PV compared to end-use customer tariffs?
How will the (to-be-determined) level of export compensation affect this?
48. How will growth of rooftop PV affect retail tariffs?
49. What types of forces are currently driving -- or restricting -- regulatory
change in the power sector?
50. How quickly have battery costs fallen recently? What are current battery
prices for utility-scale storage projects?
51. How much battery is needed for battery storage projects? For
Solar+Storage projects?
52. What types of battery storage value sources can be "realized" or
monetized in Thailand today?
53. How do Solar+Storage economics compare to conventional plants (e.g.,
CCGT, OCGT)? How will this evolve in the future?
54. At what up-front cost for battery EVs will they become cost-competitive
with conventional vehicles (considering lower "fuel" cost)?
55. How will battery EVs affect Thailand's power system?
Running on Empty addresses the critical questions facing the gas and power sectors
DETAILED TABLE OF CONTENTS (1/2)
13
200+ slides of information, modeling results, and insights
Cover 1 History of Thailand's gas industry 37 Gas market reform and Third Party Access 74
Contact info 2 Historical gas demand 38 Prices 75
Disclaimer 3 Gas consumption and the GDP multiplier 39 Thai gas price structure 76
RUNNING ON EM PTY : OVERVIEW 4 Gas demand composition - A closer look 40 Historical oil and Thai gas prices 77
Table of contents 5 Gas demand – Power drives the Thai gas market 41 Gas pricing in Thailand – A variety of structures 78
Thai energy sector entering transformative phase 6 Gas demand – The Thai petrochemical industry 42 Gas prices for major gas f ields 79
Key conclusions of the study (1/2) 7 Gas demand – Gas separation and petrochemicals 43 LNG dependency and acquisition 80
Key conclusions of the study (2/2) 8 Gas demand – Industry 44 Golden era f or LNG comes at a good time f or Thailand 81
Modeling – Gas Sector (1/2) 9 Gas demand – Industrial gas demand map 45 Global LNG market has grow n rapidly 82
Modeling – Gas Sector (2/2) 10 Gas demand – Natural gas vehicles (NGVs) 46 Short-term market characteristics favorable 83
Modeling – Pow er Sector (1/2) 11 Piped natural gas supply 47 Global acquisition and contracting in f lux 84
Modeling – Pow er Sector (2/2) 12 Overview of gas supply 48 Wide range of options in LNG prices formulas 85
13 Gas supply – Main sources 49 Market still appears to see oversupply 86
14 Gas supply – Thailand's major gas f ields 50 Modeling: Gas supply and demand 87
Key issues facing the Thai energy sector (1/3) 15 Gas supply – Thailand major producers 51 Modeling Thailand’s natural gas supply and demand 88
Key issues facing the Thai energy sector (2/3) 16 Gas supply – Thai reserves under serious pressure 52 Drivers of Thai LNG demand in modeling 89
Key issues facing the Thai energy sector (3/3) 17 Gas supply – Acceleration in drilling 53 Drivers of Thai gas demand scenarios 90
Key issues facing the Thai energy sector (3/3) 18 Gas supply – Thailand gas reserves 54 Modeled gas supply and demand scenarios 91
THAILAND ENERGY OVERVIEW 19 Gas supply – Concession extensions 55 Main scenario descriptions 92
Thailand economic overview 20 Gas supply – Myanmar production and reserves 56 Graphic representation of demand and supply scenarios 93
Thailand energy supply and demand overview 21 Gas supply – Myanmar gas infrastructure 57 Summary of gas modeling results 94
Thailand has a relatively high gas dependency 22 Gas supply – Myanmar exports to Thailand 58 Gas supply and demand – Base case scenario 95
Gas demand sources and drivers – A look back 23 Gas supply – MTJDA reserves 59 Gas supply and demand – Best case scenario 96
Electricity demand and supply overview 24 Gas supply – New exploration in Thai gulf (1/2) 60 Gas supply and demand – Worst case scenario 97
Thailand energy governance 25 Gas supply – New exploration in Thai gulf (2/2) 61 Gas demand scenarios 98
Role of energy agencies in policy making 26 Gas supply – The overlapping claim area (1/2) 62 PNG supply scenarios 99
Tw o main energy law s govern the sector 27 Gas supply – The overlapping claim area (2/2) 63 Mixed gas demand and supply scenarios 100
Energy policies and plans 28 Gas Plan & infrastructure development 64 POWER SECTOR FOCUS 101
Thailand Integrated Energy Blueprint (TIEB) 29 Thailand gas plan 65 Electricity demand 101
Pow er Development Plan 30 Thailand already has extensive gas infrastructure 66 Broad base of Thai pow er consumers 102
Gas Plan 31 Thailand has extensive LNG infrastructure plans 67 Peak demand and consumption growth – Slowing down 103
Alternative Energy Development Plan 32 Existing and planned LNG infrastructure 68 Energy eff iciency 104
Energy Efficiency Development Plan 33 Thailand LNG infrastructure development plan 69 Electricity supply 105
National Energy Reform program 34 Regulatory overview 70 Thailand pow er supply – Dominated by gas 106
Thailand 4.0 and Energy 4.0 35 Thailand gas industry structure 71 Thailand pow er supply – A further look back 107
GAS SECTOR FOCUS 36 Elaborate ref orm plans – but no easy path f orward 72 Renewable energy – A small but growing contributor 108
Natural gas demand 36 A set of related constraints makes change hard 73 Renew able energy – Overview by technology 109
Key issues f acing the Thai energy sector – Introduction
Key issues f acing the Thai energy sector – Introduction
DETAILED TABLE OF CONTENTS (2/2)
14
200+ slides of information, modeling results, and insights
Renew able energy – Historical grow th 110 Pow er sector modeling – Scenarios 147 17 GW solar by 2036 – Is it possible? 184
Renewbale energy – Dev elopment and milestones 111 Pow er sector modeling – Scenario descriptions 148 RE intermittency challenges 185
Renew able energy – Biomass 112 Pow er sector modeling – Scenario key inputs 149 RE integration – Impact on net load 186
Renew able energy – Solar PV 113 Pow er sector modeling – Global assumptions 150 Rooftop PV – Export compensation 187
Renew able energy – Wind 114 Power sector modeling – RE deploy ment scenarios 151 Rooftop PV – Tariff impact concerns 188
Renew able energy – Biogas 115 Pow er sector modeling – Key results (1/7) 152 Biomass – Set to grow but facing constraints 189
Renew able energy – Waste to energy 116 Pow er sector modeling – Key results (2/7) 153 10. Ability to bring on non-RE generation sources 190
Renew able energy – Recap and outlook 117 Pow er sector modeling – Key results (3/7) 154 New coal – Major opposition 191
Renewable enegy – Progress relativ e to AEDP targets 118 Pow er sector modeling – Key results (4/7) 155 Hydro – Diminishing returns in Laos? 192
Power Development Plans 119 Pow er sector modeling – Key results (5/7) 156 11. Sufficient regulatory & market development of power sector193
Thailand Integrated Energy Blueprint – Power sector 120 Pow er sector modeling – Key results (6/7) 157 A set of related constraints makes change hard 194
PDP – Target capacity development 121 Pow er sector modeling – Key results (7/7) 158 12. Successful adoption of new energy technology 195
PDP – Target capacity additions 122 Pow er sector modeling – Summary table 159 Battery storage – Cost declines 196
PDP – Source diversif ication targets 123 KEY ISSUES 160 Battery storage – How much battery is needed? 197
PDP – Transmission map and plans 124 1. Successful concession extensions 161 Solar+Storage – Typical sizing 198
PDP – Transmission plans and status 125 Concession extensions should provide upside 162 Battery storage – Value realization 199
AEDP – Renewable energy generation capacity targets 126 2. Success of new Thai exploration award program 163 Solar+Storage – Enhanced dispatchability 200
EEDP – EE measures 127 New exploration is a potential game-changer 164 Solar+Storage – Modeled example 201
Regulatory overview 128 Medium-sized f ind could cut LNG demand by 10% 165 Solar+Storage - Cost-effectiveness evolution 202
Key electricity authorities 129 3. Future Myanmar gas supply 166 Solar+Storage – Cost evolution vs. gas peaker 203
Relevant electricity market acts 130 PNG in Myanmar pipeline could be meaningful 167 Solar+Storage – Cost evolution vs CCGT 204
Electricity market structure 131 4. Stable LNG markets 168 Solar+Storage economics – Key assumptions 205
Priv ate sector role in power is limited to generation 132 Cost impact of LNG prices and demand volumes 169 EVs – Economics vs conventional vehicles 206
New capacity – Historical growth by IPP/SPP/VSPP 133 5. Ability to reduce gas demand 170 EVs – Impact on Thailand net load (1 of 2) 207
Solar compensation vs. w holesale rate 134 Comparison of major gas demand drivers 171 EVs – Impact on Thailand net load (2 of 2) 208
SPP hybrid f irm regulation (2017) 135 6. Ability to build out LNG infrastructure 172 STUDY KEY CONCLUSIONS 209
Industry players 136 LNG infrastructure development is complex 173 Key conclusions (1/2) 210
Generation capacity by key player 137 Serious risks in high LNG demand scenarios 174 Key conclusions (2/2) 211
Largest independent pow er producers 138 7. Successful transition to new gas market structure 175 COMPANY PROFILES 212
Thailand merit order 139 8. Ability to manage Thai power growth demand 176 AWR Lloyd – Overview 213
Prices 140 Pow er plans – From ambitious to conservative? 177 Pöyry – Overview 214
Wholesale tariffs 141 Energy eff iciency plan – Achievable? 178
Ft charge & tariff calculation 142 9. Ability to bring on new RE capacity 179
Energy subsidies 143 Solar cost declines – How long, how far? 180
Tariff components 144 Utility-scale PV – Cheaper than gas? 181
Modeling: Electricity scenarios 145 Record-low 2017 PV prices – Possible in Thailand? 182
Pow er sector modeling – Softw are 146 Solar & w ind programs – What's next? 183
AWR LLOYD CAPABILITIES
Advisor to Asia’s energy sector
AWR Lloyd is a strategy consulting and financial advisory
firm that specializes in the energy, resources, and
infrastructure sectors in the Asia-Pacific region
Founded in 2000, the firm has worked with numerous
Asian and global companies and investors to develop
and implement strategy, M&A, investment structuring,
and capital raising
Of particular relevance to this project, AWR Lloyd’s
team has worked on numerous clean energy, strategic
advisory and market assessment engagements
New Energy Practice
Around the world, technological advances, regulations and
economic drivers have transformed the energy sector, forcing
change on existing players and providing huge opportunities to
well-placed new entrants
AWR Lloyd’s New Energy Practice has developed a unique level
of expertise in renewable energy, energy storage, electric vehicles
and related industries that are experiencing growth
We help clients to conceive and execute winning strategies for
this complex and dynamic environment by providing a unique
fusion of three core businesses - strategy consulting, financial
advisory, and market research
15
PÖYRY CAPABILITIES
16
40
countries
MEUR 530
net sales
2016
130
offices
55+
years of
experienc
e
5,500
experts
10,000
projects
delivered
annually
CLIENT
FOCUS
in power generation
globally
Source: ENR 2016
international design firms
of Europe’s major energy
players use our electricity
price projections
Pöyry in Thailand
250 staff consisting of a mix of international and local experts
Regional headquarters for most of Pöyry’s Asia operations
Leading consulting engineering company in power sector in Thailand
About 50 major power plant projects and 200 power sector-related
assignments executed in Thailand
Engineering Centre for Pöyry’s worldwide operations offering
complete conceptual, basic and detail engineering services for
contractors, suppliers and project owners for their worldwide projects
About 100 projects executed annually from Pöyry Thailand office
70% RANKED
#6
Pöyry is an international engineering consultancy with over
5,500 employees in 40 countries – including 50 years in Asia
and 250 employees in Thailand
The leading electricity market consultant in Europe, Pöyry
has provided power market advisory services in SE Asia –
including over 50 market analyses & reports – since 2011
Power sector experience underpinned by deep technical
expertise, with over 160 GW of power generation projects
worldwide, spanning including thermal, hydro, and
renewables
16
RUNNING ON EMPTY TEAM
17
AWR Lloyd Pöyry
Jack Kneeland
• 20+ years of experience in consulting and finance
specializing in renewables, natural gas & power
• Head of AWR Lloyd’s New Energy Practice
• Senior roles with major investment banks including Head
of Thai Equity Research and Energy Analyst at UBS
• Master’s degree in Energy and International Finance
from Johns Hopkins University
Matt Heling
• 10+ years of experience in the electricity sector, with
expertise in energy markets, technologies, and project
finance
• Head of Pöyry Energy Consulting, Asia-Pacific
• Previously at SunEdison and Pacific Gas & Electric
Company in Northern California
• B.S. and M.S. in Mechanical Engineering, and M.B.A.
from the University of California, Berkeley
Paul Tan
• 14 years in management consulting covering
energy/power, telecommunications, private equity,
financial services, and others
• Previously at top tier consulting firms The Boston
Consulting Group and A.T. Kearney
• MBA from the Melbourne Business School and a
Bachelor of Engineering (1st Class Honors) from the
University of Melbourne
Sarut
Chayanupatkul
• Responsible for electricity market modeling, market
analysis, and financial modeling for power projects
• M.Phil. in Energy Technologies from the University of
Cambridge, M.S. in Materials Science & Engineering
from Northwestern University, and B.S. in Materials
Science and Engineering from the University of Illinois
Visoot
Phongsathorn
• 20+ years of experience within the Thai energy and
regulatory sector
• Strong track record in strategic management for M&A,
planning, and performance monitoring
• MBA from Texas Christian University and BSc in
Mechanical Engineering (University of Notre Dame)
Pongpatchara
Pongpiriyakan
• Consultant at Pöyry’s Bangkok office, with experience in
several market modelling projects across Southeast
Asia.
• M.Sc. in International Management from Bocconi
University in Italy and M.Sc. in International Economics
from Sussex University in United Kingdom
Joost Siteur • 18+ years in power and renewable energy, incl. market
analysis, investment management, financial advisory
• Former investment officer at clean energy investment
company in Thailand
• MSc in Electrical Engineering (University of Twente, the
Netherlands)
Siripoom
Warathanasin
• Analyst in Pöyry’s Bangkok office, with experience in
market modelling, renewables, and energy storage
analysis.
• Previously worked for Chevron
• M.S. in Energy Systems from Melbourne University
17
I (the “Client”) hereby authorise Vector Energy Advisory and Pöyry Energy Ltd. (collectively, the “Consultants”) to deliver the
Running on Empty report
I also agree with and accept the Consultant’s standard terms and conditions specified in the following three pages of this file
The fee for the study and deliverables is USD 6,900 excl. VAT
The study cost will be invoiced upon signature of this agreement
To purchase the report, sign and return this form to Matthew Heling via either:
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Email:
Hard copy:
Matthew Heling, Head of Energy Consulting
Pöyry Energy Ltd.
Vanit Building II, 22nd Floor
1126/1 Phetchaburi Rd, Rajchthewi
Bangkok 10400 Thailand
TERMS AND CONDITIONS (1 OF 3)
Pöyry Energy Ltd., Vanit II Bldg., 22nd Fl., 1126/2 New Petchburi Rd., Bangkok 10400, Thailand, (the “Consultant”) and [Client, address] (the “Client”) have today entered into the following agreement (the “Agreement”).
1 ENGAGEMENT
By this Agreement the Client engages the Consultant to provide consultancy services (the “Services”) in the project entitled “Running on Empty: Implications of declining natural gas reserves and other key trends on Thailand’s energy future” . The scope and details of the consultancy services are set out in the attached proposal (the “Proposal”).
2 CONSULTANT’S OBLIGATIONS
2.1 Duties of Consultant The Consultant shall deliver the Services set out in the Proposal in accordance with this Agreement. The Consultant shall exercise skill and diligence in the performance of the Services and observe recognized principles of professional ethics and respect the laws and customs in the country where the Services are rendered.
Each Proposal shall be deemed to constitute a separate work project under this Agreement. No modification may be made to any Proposal without written consent of the parties.
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All deliverables produced by the Consultant as a result of the Services such as any software code (whether source or compiled), processes, documentation, records, training materials, specifications, plans, drafts, reports and data will be referred in this Agreement as “Work Product”. The Consultant has no obligation to update the Work Product, for events taking place after the Work Product has been issued in final form.
Any Work Product delivered to the Client shall be for the benefit of the Client only, and it shall not be copied, referred to or disclosed, in whole or in part (except for Client´s or its affiliates’ internal business purpose for which the Services were initially commissioned), to a third party without the prior written consent of the Consultant (which may be withheld in the Consultant’s sole and absolute discretion).
Notwithstanding the foregoing, the Client may disclose the Work Product to its professional advisors who are bound by the non-disclosure obligations herein on a confidential and non-reliance basis.
If the Client discloses the Work Product to a third party, Client agrees to indemnify and hold the Consultant harmless from any liability, claim, damage, loss, or obligation or expense of any nature (including reasonable attorneys’ fees) relating to a claim or suit by a third party against the Consultant, arising in connection with the use of or reliance on the Work Product by such third party.
The Consultant will not be liable for any modifications or any use of the Work Product, in whole or in part, other than as agreed in this Management Consulting Agreement or separately in writing with the Consultant.
Notwithstanding anything in this Agreement to the contrary, the Client understands and agrees that the Consultant does not al-low and will not consent to the use of, disclosure of or reference to the Consultant, any of the Services, all or any part of the Work Product in connection with (i) any public securities offering in any jurisdiction, (ii) any public securities market in any jurisdiction (including, without limitation, in any report filed with any securities market or securities regulator or in any press release or in any document accessible generally by the holders or prospective holders of any security traded on any public securities market), or (iii) any offer or sale of, or trade in, securities in the United States or Canada (whether public or private, and whether or not exempt from registration in the United States or from prospectus requirements in Canada), including but not limited to any transaction involving the purchase of foreign securities by an entity established in the United States.
No advice, opinion, statement of expectation, forecast or recommendation supplied by the Consultant as a part of the Services shall be deemed to constitute a representation or warranty with regard to future events and circumstances.
2.3 Professional Team Where the Consultant has named in the Proposal or otherwise the individuals in the team rendering the Services (the “Professional Team”), the Consultant shall use its best endeavours to ensure that the same individuals actually render the Services. The Consultant may, however, by written notice to the Client substitute the individuals with others of equal or similar skills. Notwithstanding the foregoing, the Professional Team named in the Proposal or otherwise is subject to change until this Agreement has been duly signed.
2.4 Ownership of Intellectual Property; Rights to Work Product The Consultant shall retain sole and exclusive ownership and all intellectual property rights (including but not limited to copyright) of all (a) know-how, computer software, computer programs, drafts, documents, information, material, inventions, patents or designs owned by the Consultant which the Consultant may use to provide the Services, and (b) the Work Product (as defined below). The Client shall have a non-transferrable, nonexclusive, royalty-free and perpetual license to use any and all Work Product developed pursuant to this Agreement for its business use, which shall include use by the Client and its affiliates. “Work Product” means any code (whether source or compiled), processes, documentation, records, training materials, designs, drawings, specifications, drafts and data developed by the Consultant pursuant to this Agreement. The Client shall retain sole and exclusive ownership of all know-how, computer software, computer programs, drafts, documents, inventions, copyrights, patents or designs owned by the Client which the Consultant may use to provide the Services (“Client Intellectual Property”); provided, however, the Consultant shall have a non-exclusive, royalty-free and perpetual license to use any and all Client Intellectual Property in the Work Product.
3 REMUNERATION The Proposal by the Consultant to the Client shall specify whether the time based remuneration as defined in Section 3.1 or the fixed price remuneration as defined in Section 3.2 hereinunder shall apply.
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TERMS AND CONDITIONS (2 OF 3)
3.1 Time Based Remuneration The Consultant charges for the Services a professional fee based on man-days consumed, plus direct expenses. The fee is calculated in accordance with the current service rates of the Consultant in effect during the execution of the Services for the various categories of personnel used by the Consultant. Special services (legal consultation, reports, expert's opinion, and similar) and services of very short duration are charged at special rates quoted separately for each case. Additionally the Consultant charges for travel and other direct non-salary expenses and administration as defined in Section 3.3 hereinbelow unless otherwise agreed upon.
3.2 Fixed Price Remuneration The Consultant charges a fixed price for the Services as specified in the Proposal. Additionally the Consultant charges for travel and other direct non-salary expenses and administration defined in Section 3.3 hereinbelow unless otherwise agreed upon. If the scope of the Services is altered or the performance delayed by reasons not attributable to the Consultant, the Consultant has the right to charge the Client for such additional services or time consumption at the current rates of the Consultant.
3.3 Expenses The Consultant charges for travel and other direct non-salary expenses at cost as defined below;
a)Direct expenses for air, ground and sea transportation, taxi, rental car, use of personal or company car and
all other travel expenses directly arising out of, or caused by the Services;
b) Subsistence: direct expenses for hotel or other accommodation including breakfast, plus a fixed per diem
allowance;
c) All other expenses directly related to the Services, present or future, including but not limited to all kinds of
income, sales and other taxes including tax withholdings, licenses and permits, official inspections, expenses
for meeting legal requirements and regulations and other similar dues, unless carried directly by the Client.
3.4 Terms of Payment Invoices are issued by the Consultant monthly or as specifically agreed according to a payment schedule approved by the Client and the Consultant. The invoiced amount shall be available on the bank account of the Consultant within fourteen (14) days from date of invoice, in the currency prescribed, without any deduction of transfer or other charges. The interest on overdue payments shall be the reference rate of interest confirmed by the Central Bank of the Consultant’s home country plus ten percentage units.
Invoices issued by the Consultant are exclusive of any taxes, withholdings, customs duties, bank charges or similar dues or impositions. In case such taxes or other dues are imposed on the Consultant by the authorities in the Client’s country or elsewhere then such costs will be charged further to the Client.
4 LIABILITY
4.1 Warranty; Claims The Consultant shall perform the Services in accordance with the standards of skill, care and diligence generally practiced by members of the management consultancy profession currently operating in the region under similar conditions. In the event that the Consultant makes a mistake or error in the provision of the Services and, provided that the Consultant gets notice of such error or mistake no later than six months after the date of completion of the Services to the Client, the Consultant shall, at its sole discretion either (a) exert commercially reasonably efforts to take such appropriate action to correct the mistake or error, at no expense to the Client, or (b) upon submission by the Client of documented direct damages resulting directly from the Consultant's mistake or error, indemnify the Client for such damages directly caused by the Consultant's mistake or error pursuant to Section 4.2 be-low.
EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 4.1, NO EXPRESS OR IMPLIED WARRANTIES ARE MADE WITH RESPECT TO THE SERVICES TO BE SUPPLIED BY THE CONSULTANT HEREUNDER, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. THE REMEDY DESCRIBED IN SECTION 4.1 SHALL BE THE CONSULTANT'S SOLE OBLIGATION AND THE CLIENT'S EXCLUSIVE REMEDY WITH RESPECT TO ANY BREACH OF THE CONSULTANT'S WARRANTIES UNDER THIS SECTION 4.1.
4.2 Limitation of Liability Notwithstanding any provision contained herein, in no event shall the Consultant have any liability under or in relation to this Agreement (including any breach thereof) or Services for any indirect, consequential, special, incidental or punitive damages of any nature whatsoever such as but not limited to damages arising out of or pertaining to loss of use of property, loss of profits or other revenue, interest, loss of product, increased expenses or business interruption, however the same may be caused. Furthermore, the Consultant has no liability for damages which are caused by reasons or circumstances not attributable to the Consultant or which are beyond the reasonable control of the Consultant. Under no circumstances shall the Consultant's total aggregate liability under or in relation to this Agreement (including any breach thereof) or Services for any reason exceed the amount paid to the Consultant by the Client under this Agreement. The liability of the Consultant under or in relation to this Agreement or Services shall in all cases expire upon such date falling six months after the date of completion of the Services or such date falling twelve months after the date of this Agreement, whichever is earlier. All claims to the Consultant shall be presented immediately upon detection, however before the expiry of the liability period.
The Consultant shall indemnify and hold the Client, its employees and directors harmless from any claim, expense, loss or damage including reasonable attorney's fees, incurred by the Client which result from any claim by third parties that the Work Product infringes the third party's patent, trademark or copyright provided such alleged infringement does not result from either (a) the Client's modification of the Work Product or (b) the Client's use of the Work Product for other purposes than defined in this Agreement or in combination with any software, hardware or data not provided by or approved by the Consultant. The Consultant shall have no obligations under this paragraph to the Client unless (i) the Client promptly notifies the Consultant in writing of any suits, claims or demands against the Client for which the Consultant is responsible, (ii) the Client gives the Consultant full opportunity and authority to assume the sole defence of and settle such suits and (iii) the Client furnishes to the Consultant upon request all information and assistance available to the Client for defence against such suit, claim or demand.
4.3 Insurance To cover the Consultant’s liability with respect to the activities under this Agreement the Consultant shall keep in effect a general professional indemnity insurance for consulting undertakings. Upon request by the Client, a copy of an insurance certificate evidencing such insurance shall be made available to the Client.
5 MISCELLANEOUS
5.1 Confidentiality During the term of this Agreement and two (2) years thereafter the Consultant undertakes to keep confidential sensitive information relating to the Client’s business or affairs where such information has been identified as confidential by the Client (“Confidential Information”).
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TERMS AND CONDITIONS (3 OF 3)
The Consultant shall not make use of such Confidential Information for purposes outside the scope of the Services without the prior written consent by the Client. The provisions of this Section 5.1 shall not apply to information that; (a) is or becomes public knowledge otherwise than through the Consultant’s breach of this confidentiality undertaking; or (b) was obtained by the Consultant from a third party having no obligation of confidentiality with respect to such information; or (c) can be shown to be known by the Consultant by written records made prior to disclosure by the Client; or (d) in such circumstances where a competent court or law requires disclosure of Confidential Information.
5.2 Conflict of Interests The Professional Team rendering the Services shall not be required, expected or deemed to have knowledge of any information known to their colleagues within the Consultant’s organization, which is not known to them personally, or required to obtain such information. The Professional Team shall not be required to make use of or to disclose any information whether known to them or to their colleagues, which is confidential to another client. There are and shall continue to be mechanisms operating within the Consultant’s organization and within Pöyry Plc designated to facilitate the protection of each client’s interests through the use of one or several of the following measures: separate professional teams, geographical separation, operational independence, separate computer servers and mail systems. The Consultant may be approached to advise another party or parties who are in dispute with the Client, or to advise or represent interests of a party whose interests are opposed to or competing with the Client’s interests. The Consultant and the Client undertake to promptly inform each other should there be a risk of competing engagements. The Consultant shall not permit any member of the Professional Team to accept an engagement resulting in a simultaneously pending competing engagement.
5.3 Client’s Duty to Assist In order to permit the Consultant to perform the Services in accordance with the Proposal and without inconvenience, the Client shall timely perform its obligations set forth herein and in the Proposal, including, but not limited to supplying the Consultant with all information, assistance and access to the Client staff, documentation, hardware and software in the Client’s possession, custody or under the Client’s control having a bearing on the Services. The Client shall inform the Consultant of any information or developments which may come to the Client’s notice and which may have a bearing on the Services.
5.4 Independent Contractors
The Consultant agrees that it will be providing Services as an independent contractor and any employees of the Consultant involved in providing the Services shall remain only employed with the Consultant and not with the Client.
5.5 No Recruitment The Client undertakes not to enter into an employment or similar agreement with any member of the Consultant’s professional team for a period of 6 months’ from the time of completion of the Services agreed upon herein. Should the Client enter into an employment or similar agreement with a member of the Consultant’s professional team, then the Client shall pay the Consultant a compensation equal to 60 times the man day fee rate agreed for such a member of the professional team.
5.6 Subcontracting The Consultant shall be entitled to subcontract or to consult third parties for specialist tasks whenever the Consultant considers it appropriate. The liability of the Consultant to the Client shall, however, not be diminished, except in cases where the persons executing such work are liable by law.
5.7 Assignment Subject to Section 5.6 hereunder, neither party may assign or transfer any of its rights or obligations under this Agreement to any third party without the prior written consent of the other party, provided that the Consultant shall be entitled to assign or transfer all or any of its rights (but not its obligations) under this Agreement to receive payment of any sum of money to any third party without having to obtain the consent of the Client.
5.8 Integration This Agreement with enclosures contains the entire agreement between the parties and supersedes all other understandings and negotiations, whether oral, written or implied, set forth with respect to the subject matter of this Agreement.
5.9 Severability If any term of condition contained herein is held by a court of competent jurisdiction or other authority to be invalid, void, unenforceable, the remainder of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.
5.10 Force Majeure
No delay in or failure of performance by either party, other than payment of money, shall constitute default hereunder if and to the extent such delay or failure is caused by any force majeure occurrence beyond the reasonable control of the party otherwise required to perform and which by the exercise of reasonable diligence by said party could not have been prevented. Such force majeure events are, but not limited to, the following: fire, earthquake, lightning and other Acts-of-God, as well as industrial disputes, acts of terrorism, strikes, sabotage, epidemics, war, riot, mobilization and similar frustrations. In such circumstances, the party affected by force majeure shall have a duty to inform the other party within a reasonable period, not exceeding seven business days, from the date that force majeure is claimed.
5.11 Suspension and Termination Both the Consultant and the Client may terminate this Agreement or suspend its operation by giving 30 days’ prior notice in writing to the other party. Any termination of this Agreement shall be without prejudice to the rights of either party, which may have accrued up to the date of the termination.
5.12 Dispute Resolution
Disputes between the Client and the Consultant shall be sought to be settled on the basis of the principles herein contained, also when a direct answer to the controversial issues is not explicitly found. Should amicable settlement fail within a reasonable period of time not exceeding 60 days shall any dispute, controversy or claim arising out of or relating to this Agreement, or the breach, termination or validity hereof be finally settled by arbitration in accordance with the Arbitration Rules of Singapore International Arbitration Centre (“SIAC Rules”) for the time being in force which rules are deemed to be incorporated herein. The arbitration shall be conducted in the English language in Singapore.
5.13 Governing Law This Agreement shall be governed by and interpreted in accordance with the substantive laws of Singapore excluding its conflict of law rules.
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Company Name Phone number Email
Jack Kneeland +66 892 064 800 [email protected]
Matthew Heling +66 614 163 763 [email protected]
FOR MORE INFORMATION, PLEASE CONTACT: