The planned merger of two petrochemical arms of PTT Group may not be finalised next year after all, says Supattanapong Punmeechaow, chief executive of PTT Global Chemical (PTTGC).
Supattanapong Punmeechaow, newly appointed president of PTTGC, Thailand's largest petrochemical firm, says his company must ensure its business is strong before deciding on a merger with fellow subsidiary IRPC.
The newly appointed president of Thailand's largest petrochemical firm said this was due mainly to both companies being in the middle of major investment periods.
"Each firm is busy with many expansion activities. We need to ensure our business is strong before deciding on the merger," said Mr Supattanapong.
He said IRPC had 12 projects in the pipeline that would take until 2018 to finish, while PTTGC had more than 10 projects to be completed by 2020.
The two subsidiaries are cooperating in terms of oil and gas facilities to save on costs, Mr Supattanapong said.
"We really need a while to settle ourselves before proceeding seriously with a feasibility study as to whether the merger is viable," said Mr Supattanapong.
He said the merger would put PTTGC in the top five petrochemical firms in the world. It is currently the 22nd largest.
The merger idea came from its parent PTT Group as part of a strategy to combine all its petrochemical units into one giant venture.
Previously, three petrochemical arms and an oil refinery were merged to form PTTGC, which is now an industry leader in Asean.
IRPC was initially considered for inclusion in that merger plan, but due to its incompatibility with the three other firms, PTT executives decided to proceed without it.
Sukrit Surabotsopon, IRPC's president, said a feasibility study would be conducted in the second half of next year after his company completed its major Upstream Project for Hygiene and Value-Added Products.
Meanwhile, PTTGC is planning a joint venture with Indonesia's national oil firm Pertamina in an oil refinery and petrochemical complex in Balongan on Java.
The US$5-billion project will boost the capacity of the existing oil refinery to 325,000 barrels per day from 125,000 bpd.
Annual cracker capacity for olefins and aromatics will rise to a combined 1.6 million tonnes.
The project is now in the design stage and must go through the financial planning stage before construction starts in 2016.
Long term, it plans to conduct a feasibility study for an ethane production plant in North America in a bid to secure feed stock if gas in the Gulf of Thailand becomes completely depleted.
PTTGC shares closed yesterday on the Stock Exchange of Thailand at 64 baht, unchanged, in trade worth 482 million baht.
IRPC closed at 3.36 baht, unchanged, in trade worth 20.1 million baht.
