SKE turns to diversification to double 2019 revenue

SKE turns to diversification to double 2019 revenue

SET-listed compressed natural gas (CNG) trader Sakol Energy Plc (SKE) expects 2019 revenue to double to 500 million baht as a result of expansion and diversification into renewable energy.

SKE expects to tally revenue of 330 million baht this year, down 1% from 2017, after sales shrank in the third quarter.

Managing director Jakkraphong Sumethchotimetha said SKE will change its business strategy from relying on a single revenue source -- CNG trading in the transport sector -- for almost a decade.

The business will diversify with a compressed bio-methane gas (CBG) production plant and electricity generation from biomass.

"Revenue in 2019 will be 40% from power generation at the biomass project, while CNG and CBG trading will account for 60% of total revenue," Mr Jakkraphong said. "SKE will use cash from our IPO in November 2017."

Part of the budget is to develop the CBG production plant at a total cost of 85 million baht under a subsidiary, RE Biofuel Co (RBF). The plant will have a capacity of nine tonnes a day.

The CBG production plant is in Chum Phuang district, Nakhon Ratchasima, and construction is complete.

"The CBG plant is undergoing a test run, and SKE expects to be granted an operating licence this year," Mr Jakkraphong said.

He said 70% of CBG output is set to supply the sole CNG seller, PTT Plc, while SKE expects to sell the remaining output through retail channels.

A further 850 million baht has been allocated to the biomass power project being developed in Rong Kwang district, Phrae province through subsidiary Mae Krating Power Co (MKP) with a capacity of 9.9 megawatts.

MKP construction is 53% complete and is to begin operating next June, three months earlier than SKE previously expected.

"SKE aims to generate revenue from a variety of sources related to energy business, so we have decided to diversify into renewable energy," Mr Jakkraphong said.

SKE suspended a plan to develop a large truck station in Nakhon Sawan after completing a feasibility study.

Mr Jakkraphong said SKE is developing CNG gas stations along the gas pipeline owned by PTT, the national oil and gas conglomerate.

PTT has developed new gas pipelines in the North and Northeast that will begin operations soon.

SKE is carrying out CNG operations through private mother stations and also plans to develop a gas refilling station along PTT's gas pipeline.

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