Thai Oil plans Bt18-bn expansion
Thai Oil and its subsidiary Thai Paraxylene plan to raise their production capacity next year with a giant investment of US$500 million (Bt18 billion).
The parent company will spend $218 million on boosting its crude oil-refining capacity from 225,000 barrels per day to 275,000 barrels. The project will include a new sulphur treatment unit for jet fuel, which will be completed in April, and the construction of a third crude distillation unit, which will begin next month. Another $282 million will be spent on more than doubling the production capacity of Thai Paraxylene. Its present capacity to produce 420,000 tonnes of paraxylene and mixed xylenes per year will be increased to a full slate of aromatics products, including paraxylene, mixed xylenes, toluene and benzene at a combined capacity of 900,000 tonnes per year. Managing director Viroj Mavichak said this will make Thai Paraxylene Thailand's leading fully integrated producer of aromatics. All the projects are expected to be complete in the final quarter of next year and will be showing a good return on investment in 2008, he said. Thai Oil expects the break-event point on the big investment will be reached within four to five years. He said oil-producing countries are not expected to manipulate supplies next year to stimulate higher prices, so crude oil should be priced between $50 and $60 per barrel and refining margins will be $5 to $6 per barrel. Thai Oil expects most of next year's investment will come from its working capital. However, it might limit the amount it pays from its own resources to $100 million or $150 million if refining margins decline to $4 per barrel. Viroj said the company will disclose the financial details of its investment plans in the first quarter of next year. In the first nine months of this year, Thai Oil recorded revenue of Bt217.4 billion, up by 19 per cent from last year. Net profit was Bt14.75 billion, increasing by 9.5 per cent over the figure for the first nine months of 2005. Viroj said Thai Oil's results were driven by good performances by Thai Paraxylene and Thai Lube Base. Both subsidiaries are getting higher prices for their value-added products, due to high demand in the US. However, group profits have not increased at the same rate as revenue because the company's refining margin declined from $7.90 per barrel last year to $5.98 per barrel this year.
Chalida Ekvitthayavechnukul The Nation
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