Fuel Pipeline Transportation Co (FPT), a subsidiary of Bangkok Aviation Fuel Services Plc (BAFS), has resubmitted to the Energy Ministry an application for a licence to build a long-planned 6.6-billion-baht oil pipeline, says the company.
The pipeline will carry oil from Ayutthaya city north to Lamphun, the company's chairman MR Supadis Diskul said yesterday.
He said the 703-kilometre pipeline would carry oil from a depot in Ayutthaya to two depots in Phitsanulok and Lamphun, with each having a capacity of 70 million litres.
The project was proposed in 2009 when the company conducted a feasibility study before submission to the Energy Ministry to get a licence in 2013. However, the project sat fallow without clarification.
The 14-inch-diameter pipeline would have an oil transport capacity of 1.3 million litres per hour and is ready to be developed along a highway.
MR Supadis said the board of directors had already approved the project and allocated a budget.
He said the company would seek approval from shareholders to add 3.3 billion baht of registered capital to its current 260 million if it received the licence from the Department of Energy Business.
Major shareholders include BAFS with a 91% stake, Bangchak Petroleum Plc at 4.9% and Bangkok Insurance Plc at 3.5%.
Another source of funds would be a loan from commercial banks, which have said they are ready to support the project, said MR Supadis. The project is scheduled to take three years to develop.
He said the costs of carrying fuel via a pipeline would be 50% lower than transport by oil tankers, which is not only more expensive but also causes massive damage to the highways.
The feasibility study put the internal rate of return at 13%, breaking even after 13 years of operation.
The pipeline would be designed to transport a full capacity of 10 billion litres per year, but would only transport 2.33 billion litres per year in the first year of operation, expected to start in 2018.
MR Supadis said FPT would discuss the licensing process with the Energy Business Department today.
Three major companies have proposed pipeline projects to the Energy Ministry in the past three years, mostly running from the Central region to the North and Northeast regions. Those companies are PTT Plc, Thappline and FPT.
Last September, PTT proposed a 55-billion-baht oil pipeline project with two lines from Ayutthaya to Lampang and Ayutthaya to Khon Kaen. However, the projects were delayed because of the country's political unrest.
An Energy Ministry source said the government was unlikely to make any decision on such a big project as the FPT proposal over a short period of time.