PTT advances VN refinery bid

With PTT Plc's businesses facing a major restructuring prescribed by the junta, the national energy flagship will submit a US$20-billion oil refinery and petrochemical project proposal to the Vietnamese government in two weeks.

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Senior executive vice-president Atikom Terbsiri said the proposal showed PTT holding a 40% stake in the complex if it won, the Vietnamese government 20% and other partners 40%.

The complex will refine imported crude and manufacture comprehensive petrochemical products, he said.

"There are no terms of reference. All the proposal details came from our own feasibility study, and the decision will be made by the Vietnamese government," said Mr Atikom.

The complex will be in central Vietnam's Binh Dinh province near Quy Nhon city.

Rivals from South Korea, Japan, China and Middle East countries also bid, but Mr Atikom declined to name them.

Chief executive Pailin Chuchotethavorn said he would travel to Vietnam soon to present the proposal details in person.

PTT plans to offer the Vietnamese a consultancy position for the project since in addition to the oil refining and upstream petrochemical potential, the complex could develop downstream businesses for an integrated petroleum and petrochemical complex in the future, he said.

Mr Atikom said even though there were quite a few competitors in Vietnam's newly opened energy industry, the company was confident.

"We're a strong candidate, as Thailand and Vietnam are both Asean members and share a common business context in some areas," he said.

"Vietnam still has lots of room to grow, as the industry there is relatively new."

Mr Atikom said part of PTT's proposal included plans to call for the opening of the retail oil market in Vietnam, as the country's petrol stations were all dominated by local companies.

However, he declined to give further details on the retail business.

The project mainly comprises an oil refinery with capacity of 400,000 barrels of oil per day — 260,000 bpd dedicated to feedstock for petrochemicals in accordance with its proposal and 140,000 bpd slated for retailers.

The complex will also include aromatics production of 2 million tonnes per year and olefins output of 3 million tonnes per year.

Domestic demand for refined oil in Vietnam stands at 30,000 bpd on average, with a growth projection of more than 5% annually.

Vietnam's local oil refineries are producing 120,000 bpd.

The Vietnamese government has approved the expansion of local oil refinery production to 420,000 bpd total, with operations to start over the next five or six years.

Mr Atikom said the petrochemical complex would sell half its total output in Vietnam, where supplies of oil and plastic pellets were now insufficient, with the excess capacity exported.

"We're not worried about overcapacity with this oil refinery," said Mr Atikom.

"Export markets can take up any excess output."

PTT shares closed yesterday on the Stock Exchange of Thailand at 319 baht, down two baht, in trade worth 752 million baht.

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