Bangkok Aviation Fuel Services Plc (BAFS) has asked the government whether it plans to resume a 6.5-billion-baht oil pipeline project, according to managing director MR Supadis Diskul.
The project, which includes pipelines linking Ayutthaya to the North and Northeast, was initiated in 1991. At that time, the cabinet gave the nod to two firms _ BAFS and Thai Petroleum Pipeline (Thappline) _ to invest in the two pipelines.
Last December, the Energy Ministry asked the companies whether they were interested in resuming the project.
MR Supadis said BAFS replied that it was ready to invest in the pipeline between the existing depot in Ayutthaya and Lampang, a length of 550 kilometres worth 5.5 billion baht, and a 1-billion baht oil depot in Lampang, leaving the other segment for Thappline to consider.
BAFS has yet to hear back from the government.
The firm is also on course to develop and invest in the subsidiary Fuel Pipeline Transportation Co (FPT).
"We are ready to start the project right away. We're just waiting for the ministry's reply," said MR Supadis.
The 12-inch-diameter oil pipeline is expected be cheaper than road transport, which is estimated at 55 satang a litre.
The oil pipeline to the North will have the capacity to deliver 10 billion litres of oil a year.
MR Supadis said the project will complement the government's policy to increase oil reserves from 36 days to 44 days by next year and to 90 days in the next decade.
The green light from the state is needed because the project requires land infringement rights in order to lay the pipeline.
"If the government grants us permission right now, we'll be ready to start construction next year and operate in 2017," said MR Supadis.
BAFS plans to merge two subsidiaries _ FPT and JP-One Asset Co _ in order to strengthen the capital base of the new merged company and use it to invest in the project.
"Once the project is running, the gap between petrol prices in Bangkok and the northern provinces will be narrowed and logistics cost will improve, with a reduction in road accidents," said MR Supadis.
BAFS hopes to ultimately stretch farther into China's Yunnan province, where demand is high.
The firm said sales volume this year including aircraft-fuelling services at Suvarnabhumi and Don Mueang airports, will rise by 6% to 4.84 billion litres on baht appreciation and heightened tourism.
Shares of BAFS closed yesterday on the SET at 23.80 baht, up 1.30 baht, in trade worth 15.7 million baht.
About the author
- Writer: Yuthana Praiwan
Position: Business Reporter