SET-listed IRPC Plc, the petrochemical unit of PTT Plc, plans to offer its hydrocarbon liquid tank farm for the government to use to support a national strategic petroleum reserve now being considered by the Energy Ministry.
Atikom: Plenty of expansion options
President Atikom Terbsiri said the company has a combined capacity of 1.89 million barrels of liquid tanks nationwide including those located in Chumphon, Samut Prakhan and Rayong.
However, a number of liquid tanks are not utilised which could be used as a new strategic oil reserve to generate more revenue for IRPC.
He said the company is also studying a plan to build another tank farm with a capacity of one million barrels at its land bank in Rayong.
The Energy Ministry will enforce oil traders and refiners to increase oil reserve by another 1%, or 44 days from 36 days at present. In the longer term, the national reserve will be expanded to 90 days, or 25%.
"We have advantages in our facilities to be used as an oil reserve such as a deep-sea port, landbanks, human resources and management of logistics of liquid substances," said Mr Atikom.
If the national reserves are not placed inland, IRPC will offer an alternative choice for using its deep-sea port in Rayong to be a location for a floating national reserve project, he said, adding that IRPC's port could serve 2 million barrels of oil at the same time.
The company has its own reserves of 1.2 million barrels including legal and working stocks of 36 days, but will collaborate with other oil refineries to meet the mandatory additional reserve of 44 days set by the Department of Energy Business.
"It cost us more than 3 billion baht to increase the reserve to 44-45 days. We have to discuss this issue with the department," said Mr Atikom.
Meanwhile, IRPC plans to invest US$1.25 billion during 2013 to 2015, of which one billion will be used to enhance the efficiency of the refinery while the remaining $250 million will go to super absorbent polymer (SAP) project.
The refinery upgrading project will convert residue into high-price hydro carbon such as propylene (PP) and diesel.
The project will not only increase oil refinery utilisation to 100% from 80%, but will generate petrochemical feedstock for PP production and a sulphur capture unit will be included in the project.
IRPC has already finished bidding for a contractor for the project, expected to be operational in February 2015.
The company has been in talks with potential partners for the SAP project. The deal is expected to be finalised this quarter.
The project is a part of IRPC's Phoenix Project investment plan which runs through 2015. Other projects which are nearly finished include a rubber oil production plant and capacity expansion of petrochemical.
The company is studying the second phase of the Phoenix Project which will focus on high value-added petrochemical and engineering plastic.
Shares of IRPC closed Friday on the Stock Exchange of Thailand at 4.24 baht, up four satang, in the trade worth 233 million baht.