LPG prices spark optimism for SGP

LPG prices spark optimism for SGP

SET-listed Siamgas and Petrochemical (SGP), Thailand's second largest liquefied petroleum gas (LPG) trader by volume, expects its revenue to reach a new high this year despite lower sales than in 2019, thanks to high global LPG prices.

The company recorded a high of 69.4 billion baht in revenue in 2019, followed by 69.1 billion in 2018.

Jintana Kingkaew, deputy managing director and chief financial officer of SGP, said the company based its forecast on the global prices of propane and butane, also known as Saudi Aramco reference prices. The prices are projected at US$550-600 per tonne, up from $390-400 per tonne last year. In 2019, the average price was $438 per tonne.

Mrs Jintana said more revenue is also expected to result from pre-purchase orders from buyers in the third and fourth quarters, as well as the easing of lockdown measures in many Asian countries, including China, Singapore and Malaysia.

SGP maintains its target of sales growing by 15% to hit 3.73 million tonnes this year across Asian markets, up from 3.24 million tonnes last year.

Before the pandemic, its sales stood at 3.83 million tonnes in 2019.

SGP's sales in the domestic market are expected to make up 30% of total sales, with 70% coming from LPG trade in China, Malaysia, Singapore and Vietnam.

"Our sales in many markets will grow significantly because of the restoration of consumer purchasing power following Covid-19 vaccinations," she said.

Mrs Jintana said the company plans to focus more on business diversification in the long term. It is interested in power generation and liquefied natural gas (LNG) imports.

SGP operates a 230-megawatt Mawlamyine gas-fired power plant and a 10MW diesel-fired power plant in Myanmar.

The company is conducting a feasibility study on an LNG business after energy authorities agreed to liberalise LNG shipping, previously monopolised by national oil and gas conglomerate PTT Plc.

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