FPT studies oil pipeline into Myanmar

FPT studies oil pipeline into Myanmar

Fuel Pipeline Transportation (FPT) plans to conduct a feasibility study to extend an oil pipeline to Myanmar to capture dynamic oil demand.

FPT is a subsidiary of SET-listed Bangkok Aviation Fuel Services.

FPT chairman MR Supadis Diskul said the company has set up a study team in August to determine project viability.

The oil pipeline will be extended from an existing pipeline running from Ayutthaya to Lamphun.

The extension, if executed, will link Tak province in Thailand and Mawlamyine district in Myanmar.

"FPT sees long-term potential in Myanmar as a new market with petrol car users, while Thailand gradually adopts electric vehicles in the next couple of years, which will trim oil demand," MR Supadis said. "In the past two years, EVs have had limited demand from Thai motorists, but EV prices have become very competitive, narrowing the price gap with petrol or diesel cars."

He said FPT is confident that oil demand in neighbouring countries will rise in the future, so oil transport via pipeline will become more competitive and crucial than truck shipments.

Relevant regulations should facilitate oil exports through pipelines, MR Supadis said, noting that the Petroleum Act of 2017 has yet to be amended.

"We plan to discuss the downstream petroleum sector with the Energy Business Department to revise the act to allow private operators to export oil through the pipeline system," he said. "FPT expects there to be dialogue among national officials from Indochina at the recent Asean Ministers on Energy Meeting about pipelines connecting Cambodia, Laos, Myanmar and Vietnam."

FPT's long-term business outlook sees the expansion of oil pipelines to China through Laos once regulations and authorities give way.

FPT has started the first phase of pipeline operations from Ayutthaya to Phichit across 209km. The oil depot has been operating since late March.

The second phase extends the pipeline by 367km and includes oil depots from Phichit to Lampang and is over 80% complete, scheduled to start operations in early 2020.

Total investment is 9.7 billion baht, with a pipeline length of 576km between Ayutthaya and Lampang and a capacity of 9 billion litres a year.

The extension will head west from Phichit to Tak and into Myanmar, then move south to the seaport in the Gulf of Martaban.

FPT expects the two phases of oil pipelines to break even within 10 years.

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