PTT wants Borneo mine

PTT International Co, a wholly owned unit of the majority state-owned oil company PTT Plc, is looking to acquire coal assets in Indonesia to diversify its energy business overseas.

The company is in talks to buy 100% of the shares of a coal mine in Kalimantan, Borneo. The negotiations should be finished within six months, said Chitrapongse Kwangsukstith, acting president, CEO and chairman of PTT International.

The move would follow PTT's investment in the Sebuku Jambayan coal mine, where the company bought a production licence from the local operator earlier this year. The group first diversified into the coal business late last year.

Once the negotiations are finalised, the coal mine would start production immediately, said Mr Chitrapongse.

This project is part of PTT's investment plan that aims to lift overseas investment to 50% of the total budget by 2014 from 20-30% at present.

The company's first Indonesian coal mine is projected to generate $500 million from the annual production of nine million tonnes this year. The output is expected to increase to 11-12 million tonnes next year and 20 million tonnes by 2014.

PTT spent $335 million buying an Australia-based miner, Straits Resources Co. The sub-bituminous grade coal is sold to power plants in China, India, Japan and Korea.

"Diversifying into other fields besides our core oil and gas operations is for integration. Thus, we have moved to coal, biofuels and liquefied natural gas (LNG)," said Mr Chitrapongse.

Last year, PTT acquired a palm oil plantation from the Kalimantan palm oil producer PT Mitra Aneka Rezeki through the wholly owned company PTT Green Energy Co (PTTGE).

The project covers 87,500 rai, of which 19,375 rai would be used for commercial palm oil production, 31,250 rai for plantations and the final 36,875 rai for future expansion.

He said the Indonesian subsidiary was preparing to construct a new crude palm oil refinery, expected to be completed in 2011 or 2012.

PTT is keen on crude palm oil because of growing concerns over global warming and soaring fuel prices.

PTT is also investing in LNG and floating LNG (FLNG) abroad. PTT International will join with PTT Exploration and Production Plc to develop the Cash & Maple offshore project in Australia.

They expect to begin FLNG production from the field by 2013-14, added Mr Chitrapongse.

Prasert Bunsumpun, the president and chief executive of PTT, yesterday called on national oil companies in Southeast Asia to step up their activities related to biofuels to cope with the impact of oil price fluctuations.

"Oil resources are being depleted and energy demand will return to positive growth of 1-2% when the global economy recovers, so we need sustainable development," he said at the opening of the ninth Asean Council on Petroleum Conference and Exhibition (Ascope) in Bangkok.

Shares of PTT closed yesterday on the SET at 239 baht, unchanged, in trade worth 857 million.

Relate Search: PTT International Co, Chitrapongse Kwangsukstith, Sebuku Jambayan, Straits Resources Co, liquefied natural gas, PTT Green Energy Co, PT Mitra Aneka Rezeki