TOP earmarks B1bn for energy startups
Move aims to handle refinery disruptions
Thai Oil Plc (TOP), the country's largest oil refiner, has allocated a budget of 1 billion baht for innovation to seek new energy startups worldwide.
Wirat Uanarumit, president and chief executive, said this budget will be a venture capital fund to encourage startups, handling energy activities and disruptive technologies from 2019-21.
TOP has already teamed up with a US startup, he said.
The company will seek another startup in Israel that has high innovation potential.
"We are looking for new business to diversify when the oil refinery segment is disrupted," said Mr Wirat.
He said TOP is ready for a trial of new energy technologies as it has prepared its facility to support experiments.
Mr Wirat said the petroleum industry is adopting disruptive technology because of concerns about global warming.
The new innovation will also support its expansion via its Clean Fuel Project (CFP).
The US$4.83-billion project is set to begin construction in the first quarter of 2020 and start operations in early 2023.
The CFP will expand capacity to 400 kilobarrels per day (KBD) from 275 KBD.
Refinery costs will be trimmed from crude oil input. TOP normally uses light crude oil for its refinery, which is more expensive, but CFP plans to use heavy crude.
"Heavy crude oil is cheaper by $7 per barrel than light crude oil," said Mr Wirat.
"Heavy crude oil will make up 50% of the crude oil input in the near future."
The output of refined oil will increase in marginal terms for light distillate output from 23% to 25% and middle distillate will increase from 53% to 62%.
The CFP will reduce the output of fuel oil to 13% from 17%.
Some refined oil output will have naphtha, which is a raw material of petrochemical products, totalling 2.2 million tonnes per year.
"TOP will conduct a feasibility study to produce heavy and light naphtha products from the CFP during the project's development period," he said.
"TOP is searching for potential buyers of new naphtha products. They should be either existing or new petrochemical makers."
Mr Wirat said the new naphtha business would take several years to finalise as part of the Beyond CFP strategy.
"Both CFP and Beyond CFP should help us reach net profit of over $1 billion in 2030," he said.
In 2018, TOP posted net profit of $312 million.
TOP has three petrochemical production units: Thai Paraxylene Co, Solvent and Chemical Products Co and Labix Co.