Top Thai energy firm PTT PCL expects a new gas separation plant caught up in an environmental row to start up in the middle of this year, which would boost its gas sale volume growth to more than 10 percent. But growth might be cut to 4-5 percent if the start-up is delayed until next year by a court case over health and environment problems at the Map Ta Phut industrial estate, Chief Financial Officer Tevin Vongvanich told Reuters.
"If it is delayed, growth will not be as high as expected," he said in an interview, adding PTT would import large quantities of liquefied petroleum gas (LPG) to help meet rising demand. The $780 million gas separation plant is one of 56 projects that are still suspended on the estate in the eastern province of Rayong, home to the world's eighth-biggest petrochemical hub. The PTT group, Thailand's largest company with market value of $22 billion, has 25 projects worth a combined 130 billion baht ($4 billion) at Map Ta Phut.
Of these, 15 are suspended, and PTT has submitted an appeal to the Supreme Administrative Court to try to get nine of them including the gas plant to get the go-ahead, Tevin said. State-controlled PTT planned to spend about 80 billion baht ($2.5 billion) over the next five years on overseas expansion, looking in particular for opportunities to invest in coal, liquefied natural gas (LNG) and palm oil businesses, Tevin said.
It has signed a deal to buy 1 million tonnes of LNG a year from Qatar from late 2011 after the construction of its first LNG import terminal is completed in the third quarter of 2011. "It will take around 4-5 years until LNG demand rises to 5 million tonnes," he said adding PTT did not need to rush into secure deals with new LNG suppliers. The foreign expansion, which accounts for about 30 percent of PTT's five-year, $7.3 billion investment plan, would focus on resource-rich countries like Indonesia and Australia.
Competing with top regional firms like Malaysia's Petronas and China's CNOOC, PTT is looking for foreign assets to meet fast-growing domestic demand. The more recent deal was in April 2009, when PTT spent $335 million to buy part of Australian miner Straits Resources' coal and salt assets. The deal marked PTT group's first foray into the coal business and its second investment in Australia.
PTT runs Thailand's gas pipeline monopoly and controls more than 30 petroleum, gas exploration, petrochemical and refinery businesses. It has stakes in five of Thailand's seven refineries, including top refiner Thai Oil, PTT Aromatics and Refinery and unlisted Star Petroleum Refining Co, also 64 percent owned by Chevron. Asked about market rumours PTT was keen to buy a stake in rival Esso (Thailand), a Thai unit of Exxon Mobil, Tevin said PTT was not interested in buying a stake in a domestic refinery and was keen to dilute its 36 percent stake in Star Petroleum.
Star Petroleum, which operates a refinery with capacity of 150,000 barrels per day in eastern Thailand, is expected to sell a stake of about 30 percent in an initial public offering later this year, he said. PTT's refineries are expected to run at about 80-90 percent this year and there was no plan to cut their run rate, given they can use products from refineries to feed petrochemical plants.
PTT, which uses Dubai crude as its benchmark for product prices, expected average oil prices of about $75 a barrel this year, higher than $62 last year, he said, adding rising crude prices should boost its product prices and margins. PTT is expected to show revenue of 1.78 trillion baht this year, up 12 percent, according to 19 analysts polled by estimates tracker I/B/E/S. Net profit is estimated at 75 billion baht this year, up 27 percent from 2009.
PTT planned to raise more then 20 billion baht in new funds later this year after raising $500 million through loans already this year, Tevin said. The proceeds will be used mostly to refinance debt. On Monday, PTT shares closed down 1.6 percent at 247 baht, underperforming a 0.96 percent fall in the market. The stock was trading at 9.7 times estimated earnings, versus 16 times of China's Sinopec and 16.3 times of CNOOC.