SET-listed PTT Global Chemical Plc (PTTGC) expects to sign a joint-venture agreement with Indonesia's national oil and gas firm Pertamina next year for a US$4-billion chemical complex in Java.
The Java complex will meet polymer demand in Indonesia, says Mr Bowon. APICHIT JINAKUL
Bowon Vongsinudom, the new chief executive of Thailand's largest petrochemical producer, said PTTGC and Pertamina welcome other strategic partners to jointly develop the world-scale project.
Details of the investment will be announced later this year. Once the agreement has been signed, it will take three years to complete the plant's construction and go into operation, he said.
"Polymer demand in Indonesia has risen sharply every year, most are imported from other Asian countries. So this project will be an import substitution," said Mr Bowon.
PTTGC has also conducted a joint feasibility study with China's state-owned Sinochem to develop a petrochemical complex in the mainland but details including project costs have yet to be finalised.
PTTGC has planned capital expenditure (capex) of 14 billion baht for next year and 2015 including expanding its second aromatics plant, third olefins unit and second phenol unit.
The company has maintained the seven-year capex through 2020 at $11 billion although the world economy is slowing down, said Mr Bowon, adding that all the projects are long-term investments.
Meanwhile, PTTGC estimates the cost of business disruption and expenses stemming from the oil spill at Koh Samet over the last 10 months will total 2.1 to 2.4 billion baht.
The estimates are based on the fact that PTTGC's low-density polyethylene production was shut down for three and a half months, incurring revenue loss of 600 million baht. Meanwhile, around 800 million baht was realised from a two-month shutdown of the fifth gas separation plant in Rayong due to lightning, disrupting raw material supply for PTTGC.
The company has set aside cash reserves of 700-1,000 million baht to compensate people and businesses in Koh Samet and other parts of Rayong which were affected by the oil spill. Compensation is expected to be paid out between the end of this year and next year.
More than 16,000 people registered with the local administration for compensation granted by PTTGC, of which 5,000 have been paid 500 million baht. The remaining 11,000 requests are being screened by the local administration.
"The compensation and business disruption may not significantly affect our profitability because over the last 10 months we managed to cut energy expenses by 2.1% to help offset those losses," said Mr Bowon.
PTTGC, local administrations and the Ministry of Natural Resources and the Environment have revised crisis management practice for oil spills to prevent a repetition of the accident, he said.
Shares of PTTGC closed Monday on the SET at 77 baht, down 75 satang, in trade worth 321.234 billion baht.