Thai Oil Plc (TOP), Thailand's largest oil refinery by capacity, expects to make the last payment of its share purchase in PT Chandra Asri Petrochemical Tbk (CAP), Indonesia's largest petrochemical producer, early next year.
TOP wants to gain a toehold in Indonesia's growing petrochemical industry.
The payment, valued at US$270 million, will follow the first tranche of payment worth $913 million made at the end of last year, said Wirat Uanarumit, chief executive and president of TOP.
The investment should enable CAP to build a new production facility named PT Chandra Asri Perkasa (CAP2), estimated to cost $5 billion. The new plant should increase CAP's capacity to 8 million tonnes per year, up from 4.2 million tonnes.
Other major shareholders in CAP include SCG Chemicals Co, PT Barito Pacific Tok, Marigold Resources Pte and Pak Prajogo Pangestu (Barito Group).
Mr Wirat said the last payment will be made at the same time as TOP restructures its financial plan by diluting ownership in Global Power Synergy Plc, the power generation arm of PTT Plc, and increases registered capital by 2.75 billion baht.
PTT is also the parent firm of TOP.
This fundraising plan was designed to finance the development of CAP2, part of a move to produce value-added products in the industry.
"We want to add value to our existing assets, products and market to reduce high dependency on a single source of profit -- oil refining -- following our huge loss in oil stocks due to price fluctuations in 2019," he said.
TOP plans to supply 1 million tonnes of raw materials, including naphtha and liquefied petroleum gas, annually to CAP2, which is scheduled to operate by 2026.
The company also projects to supply feedstock to CAP2 from its $4.82-billion clean fuel project (CFP) in Chon Buri's Sri Racha district.
CFP, currently under construction, is set to start operation in 2023. It is expected to increase TOP's oil refinery capacity by 45% to 400,000 barrels per day.
Once CFP is completed, TOP expects it will have the largest oil refinery capacity in Asean.