PTT Global Chemical Plc (PTTGC), Thailand's largest petrochemical producer by capacity, will launch four investment projects worth a cumulative US$1.22 billion (38.6 billion baht) in the next two years, marking the company's biggest spending spree in over a decade.
Energy companies must be prepared to muster robust investment portfolios, as the global petrochemical industry is expected to ride an upward trend for the rest of the decade after bottoming out.
SET-listed PTTGC will build a new polyol production facility worth $888 million, a new methyl ester production plant worth $288 million, and a plastic polymer package production worth $47 million. All facilities will be located in Map Ta Phut, Rayong, according to a source at the company.
PTTGC is also considering whether to invest in a $4.5-billion olefin cracker in the US and a polymer processing production plant in Asean, the source said.
"Under our fast-growing business plan, we still emphasise high-priced plastic polymers like auto parts, building materials, engineering plastics and medical equipment plastics, in order to compensate for our commodities or ordinary plastic products," the source said.
In related news, Samsung Engineering awarded PTTGC a construction contract worth $985 million.
SET-listed TTCL Plc will partner with PTTGC on the project. All parties signed the contract agreement yesterday in Seoul.
The project will be performed on a EPCC (engineering, procurement, construction contracts and commissioning) lump-sum turnkey basis, with CB&I Technology Inc as licence provider.
The plant will produce 500,000 tonnes of ethylene a year through the Naphtha Cracker Unit, as well as 250,000 tonnes of propylene per year.
The olefins reconfiguration project (ORP) is expected to be completed by the end of 2020 and will be located in Map Ta Phut, some 150km southeast of Bangkok.
Supattanapong Punmeechaow, PTTGC's president and chief executive, said the project will boost PTTGC's upstream petrochemical capacity from 2.988 million tonnes to 3.738 million tonnes a year.
The new plant will use naphtha and liquefied petroleum gas as raw materials to enable PTTGC to make ethylene and propylene, the main feedstock for plastic products like packaging, pipes and tableware.
Mr Supattanapong said PTTGC has made substantial investments in basic infrastructure and has integrated its petroleum and petrochemical businesses on the Eastern Seaboard over the past three decades.
The company's investment plan is in line with the government's policy to develop the flagship Eastern Economic Corridor.
The ORP plant has been approved and met all environmental health impact assessment requirements as established by the Office of Natural Resources and Environmental Policy and Planning.
The Industrial Estate Authority of Thailand granted the company a permit to operate in an industrial estate.
PTTGC shares closed yesterday on the Stock Exchange of Thailand at 98.25 baht, down 1.50 baht, in trade worth 2.3 billion baht.