PTTGC seeks co-investment with Sinochem in China

PTT Global Chemical (PTTGC) is keen to join China’s Sinochem to set up a petrochemical plant in that country, said Anon Sirisaengtaksin, chief executive officer of PTTGC.
He made the remark on May 14, before going to China to discuss a possible collaboration between PTTGC and Sinochem International. The two companies recently signed a memorandum of understanding to conduct a joint feasibility study on a petrochemical business focusing on polyurethane and bio-based chemicals to serve the growing auto, construction, and electronics industries.
PTTGC has already set up a pilot project on exporting its products to China. If the test is successful, this might lead to the aforementioned petrochemical plant.
Last month, PTTGC signed a tentative deal with oil and gas company Pertamina to develop a petrochemical complex in Indonesia worth up to Bt150 billion (US$4.8 billion). The deal will involve determining the framework of their collaboration, studying the details of investment and the business plan, and setting up a joint venture to establish the petrochemical facility.
The complex will be comprised of a refinery, an olefin plant with capacity of 1 million tons per year, and a downstream polymer plant, all designed to serve the fast-rising Indonesian market.
The cost of establishing the complex will be Bt119 billion to Bt149 billion (US$3.8 – 4.8 billion). Indonesia’s Pertamina will own 51% of the project, while PTTGC will hold the remainder.
Anon said PTTGC was in talks with other companies in the hopes they will sign on to this Indonesian project as well. PTTGC will allocate a small part of its 49% share in the project to this third strategic partner. It hopes to wrap up the deal soon before signing the tripartite joint-venture agreement in December 2013.
He said Pertamina welcomed the plan to invite a third partner into the project. The project demands massive investment, plus a short time line. The development should be completed by late 2018.
The joint venture serves as part of PTTGC’s strategy of boosting its strength by expanding its regional markets. It is also possible that in the future PTT Group and Pertamina will expand their collaboration into other business areas.
Meanwhile, Pailin Chuchotta-worn, CEO and president of PTT, said the group expected to finish studying a plan to set up an oil refinery and petrochemical complex in the coastal province of Binh Dinh, Vietnam within the year. He added that if the study found it was a worthwhile investment, it would not be difficult to draw foreign partners to invest in the project. The refinery is expected to have capacity of 600,000 barrels per day (bpd).
As part of its continued expansion of petrol stations in ASEAN, PTT is expected to set up its first two stations in Yangon next year, each expected to sell 500,000 liters per month.
PTT has also joined with the Myanmar government to upgrade its existing refinery, which currently has a capacity of 20,000-30,000 bpd. Oil demand of oil in Myanmar is 70,000 bpd.
(May 17, 2013)