Thai Pipeline Network Co (TPN), a subsidiary of MAI-listed Power Solution Technologies Plc (PSTC), plans to extend the second phase of its oil pipeline in the northeastern provinces to Laos.
The second phase will be on top of the ongoing development project for the oil pipeline and depot from Saraburi to Khon Kaen. The extension will cross the border into Laos.
"We expect to sign a memorandum of understanding with the Lao government in April, and after that we will take six months for a feasibility study of the pipeline development," said PSTC chairman Panu Seetisarn. "The extension of the oil pipeline will be planned tentatively in two phases: from Khon Kaen to Vientiane and from Vientiane to Laos's northern subdivisions, to be assisted in the feasibility study by China's state agencies."
Mr Panu said the feasibility study is to determine the remunerative investment in extending the oil pipeline to Laos. The neighbouring country imports roughly 90% of its oil from Thailand, the equivalent of 1.2 billion litres a year, and the oil must be transported by road only.
"Oil consumption in Laos will increase every year because of growth in GDP and vehicle population," Mr Panu said.
TPN yesterday signed a 9.2-billion-baht turnkey contract with China Petroleum Pipeline Engineering Co (CPP), a storage and transport solutions provider, to build the oil pipeline and depot from Saraburi to Khon Kaen.
The signing contract ceremony was presided over by Energy Minister Siri Jirapongphan.
Construction will begin soon and pipeline operations will start in the fourth quarter of 2021, Mr Panu said.
The oil pipeline is a length of 342 kilometres from Sao Hai district in Saraburi to Baan Phai district in Khon Kaen, passing 55 subdistricts, 18 districts and five provinces.
The depot will be in Khon Kaen with a capacity of 140 million litres, linking with the depot in Saraburi.
Mr Panu said the new pipeline will reduce oil transport via road by 88,000 trips a year.
He said TPN has cut development cost by 23%, from 12 billion to 9.2 billion baht, due to new technology, CPP's good management and the baht's appreciation.
"We received approval of the environmental impact assessment report in January," Mr Panu said.
According to the Energy Business Department, the Saraburi-to-Khon Kaen segment is part of the second phase of the nationwide oil pipeline network.
The first phase of the network started from oil refineries in the Eastern Seaboard, running to Saraburi and Ayutthaya provinces, passing through Bangkok and Don Mueang and Suvarnabhumi airports.
The first phase has a total length of 460km and is operated by Fuel Pipeline Transportation Co (FPT) and Thai Petroleum Pipeline Co.
The second phase includes the oil pipeline to northern provinces, with FPT as developer and operator.