SET-listed Electricity Generating (Egco) has branched into oil pipeline transport and depot services, acquiring a 44.6% stake in Thai Pipeline Network (TPN) in a deal worth 3 billion baht.
Egco bought 7.74 million existing shares in TPN from Biggas Technology, an oil and natural gas transport and service provider, and 3.19 million newly issued shares, totalling 10.93 million shares, said Jakgrich Pibulpairoj, president of Egco.
Egco entered into the share purchase and subscription agreement on Sept 4 and signed the shareholders' agreement on Wednesday, he said.
TPN provides oil pipeline transport and oil depot services to the Northeast.
TPN plans to expand its oil pipeline system in northeastern Thailand. The pipeline will connect the oil depot owned by Thai Petroleum Pipeline in Saraburi to TPN's 142-million-litre oil depot in Khon Kaen through a recently constructed 342.8-kilometre underground pipeline.
The pipeline will have a total capacity of 5.44 billion litres that can be boosted to 7.34 billion litres in the future.
The project is under construction, scheduled to start operations in the fourth quarter of 2021.
"This investment marks another step in Egco's investment in energy-related businesses," said Mr Jakgrich.
"Oil pipeline transport has long-term potential with good investment returns. This is a large-scale project significant for the economy."
He said the investment project is supported by the government as the pipeline will meet rising demand for oil in the northeastern provinces.
"The majority of customers are oil companies," said Mr Jakgrich.
He said the cooperation with Biggas will increase competitiveness and create greater opportunities in the near future.
Egco, country's first independent power producer, is exploring investment opportunities related to its core business including liquefied natural gas and industrial estates. The company is conducting an environmental impact assessment report and encouraging public participation in the development of Egco Rayong Industrial Estate to serve rising investment in the Eastern Economic Corridor.
Egco operates 27 power plants with total contracted capacity of 5,147 megawatts in six countries: Thailand, Laos, the Philippines, Indonesia, Australia and South Korea.
Egco's power plants generate electricity using various fuel sources such as natural gas, coal, biomass and hydro.