PTT Plc, Thailand's largest seller of liquefied petroleum gas (LPG), will invest 4.4 billion baht from 2018 to 2023 to increase safety measures at its gas-producing assets.
The Thai LPG market will continue shrinking at a 2% rate, on par with last year's decrease, it projected.
Muninth Triphop, PTT's executive vice-president of commercial marketing, said some sectors of the LPG domestic market have declined after the government's gas subsidy, administered through the state Oil Fund, was removed in 2014.
The huge subsidy totalled 300 billion baht from 2008-2014, and included most gas users.
The capped price lowered LPG prices by almost 60%, and invited smuggling into neighbouring countries until the subsidy was removed. Millions of consumers in Thailand shifted from petrol-based engines to LPG engines to escape high petrol prices.
Many oil-compatible vehicle engines were also modified to run on LPG, promoting an explosion in demand of the commodity.
Mr Muninth said the market is reverting to a natural growth rate and facilities are in need of maintenance and safety equipment.
The company will emphasise the installation of a new model of cylinder valve, namely the check lock valve (CLV), nationwide. PTT has 15 million gas cylinders, and installing CLVs in all of them will cost upwards of 2.4 billion baht.
CLVs will be added to existing safety equipment to prevent leakage. The model to be installed, field-tested in 2016, was designed and patented by PTT and costs 160 baht per unit.
He said another 1.2 billion baht will be allocated to maintenance gas cylinders at a cost of 200 million baht each per year from 2018 to 2023. The remaining of 800 million baht will be spent on rebuilding cylinders that are out of order or retired.
After the subsidy ended, the market is still highly competitive, particularly in the automobile sector and gas pump retail sectors, said Mr Muninth. PTT holds a 48% market share of the 4.1-million-tonne LPG market.
He expects PTT sales in the household sector will grow by 1% this year, on par with last year. Sales for the auto sector are expected to dip 10%, with industrial sector sales growing 3%.
In the automobile sector, PTT plans to add non-oil-based products at the gas pump rather than participating in the expected price war.
"This strategy may be better because motorists will receive many services," said Mr Muninth.
In the long term, PTT plans to modernise the design of its gas cylinder to match the new design of low-rise residential project. In 2015, PTT introduced a composite material gas cylinder to replace steel models in the Deep South provinces to prevent them from being used as bombs. Some 80% of the 62,000 cylinders inthe region have been replaced at a cost of 2,700 baht per unit.