SET-listed Thai Oil Plc (TOP), the country's biggest oil refiner, is expected to finalise its facility construction bidding document and release it to potential bidders by the first quarter of next year.
President and chief executive Atikom Terbsiri said the facility is set to raise capacity by 45% to 400 kilo barrels a day, up from 275 at present, with an investment budget of US$3-4 billion.
He said the new facility will be located at the company's existing refining unit 1 and unit 2 that are adjacent to the Si Racha deep-sea port in Chon Buri.
The capacity expansion plan, which is named Clean Fuels Project (CFP), is expected to help enhance its refinery efficiency and control refining costs. The company plans to develop two new refineries to replace units 1 and 2, which have been operating for about 50 years.
After releasing its bidding document, which is due in the first quarter of next year, Thai Oil would start evaluating the return on investment and ask for approval from its board of directors and shareholders by the end of next year, when it is set to make a final decision on the project.
Thai Oil projects that global crude oil prices next year will be in a range of $50-$55 per barrel, up from an average price of $40.3 a barrel this year.
With oil prices set to rise next year, Thai Oil expects its total revenue will reach 280-300 billion baht, up 10% from this year, when it is expected to have total revenue of around 260 billion.
In the third quarter of this year, Thai Oil posted a substantial rise in profit on increased spreads, currency exchange gains and greater income from petrochemicals.
It had total sales revenue of 68.5 billion baht, down 8.3% from the same period last year. Net profits in the third quarter were 2.94 billion baht, reversing a net loss of 2.29 billion in the same period last year.
A gross integrated margin of around $7 per barrel this year is estimated to be unchanged next year.
Thai Oil is building a new refining facility near its existing refinery (above) at Si Racha, Chon Buri. (File photo by Jetjaras Na Ranong)
Thai Oil has just announced capital expenditure of $357 million for next year, intended to improve efficiency and reduce production costs.
The capex includes oil inventory expansion, in line with national policy, which requires that oil refiners store larger oil reserves.
The capex also includes plans to expand its loading fuel unit for oil trucks and expand it existing oil jetties.
Although revenue from its aromatics business will be low next year as aromatics prices are set to fall to around $180 per tonnes next year, compared with an average of $280-$320 a tonnes this year, Thai Oil is not concerned. Mr Atikom said falling aromatics revenue is expected to be offset by rising revenue from its production of linear alkyl benzene (LAB) and its power generating business.
He said the new LAB production facility is expected to run at full capacity of 120,000 tonnes per year.
The company also expects to start operating its two small power-generating units at full capacity -- 240 megawatts -- which would help generate more revenue to offset falls in its aromatics business.
TOP shares closed Friday on the SET at 72.50 baht, unchanged, in trade worth 192 million baht.