Thailand’s PTT Targets $28bn Investment for 2021-25

Thailand’s state-controlled oil firm PTT is planning investment of 850.6bn baht ($28.3bn) across all its operations over the next five years, as it focuses on developing the country’s LNG and natural gas industry while seeking future energy opportunities.

Planned capital expenditure (capex) includes construction of its second 7.5mn t/yr Nong Fab LNG receiving terminal in Rayong, the third-phase expansion of its 11.5mn t/yr Mab Ta Phut terminal, its seventh gas separation unit at the Mab Ta Phut industrial estate in Rayong and a fifth natural gas transmission pipeline project. Group spending also covers the firm’s retail, downstream and power operations.

Thailand relies mainly on natural gas to generate power but domestic supplies are falling behind demand, requiring the country to import more LNG and develop additional gas infrastructure. It imported 5.61mn t of LNG in 2020, up from 5.09mn t in 2019, according to customs data.

The planned investment for 2021-25 compares with an earlier committed capex of Bt827bn for 2021-24. The latest planned spending will also be used to expand PTT’s LNG value chain in domestic and international markets, develop its gas-to-power business and electricity value chain, as well as for renewable energy efforts to reduce greenhouse gas emissions. PTT is targeting to expand its renewable energy portfolio to 4.3GW by 2025, scaling up to around 8GW by 2030 from 200MW as of November 2020.

Performance review

The firm unveiled the 2021-25 investment plan as it reported a lower profit of Bt13.15bn in the fourth quarter of 2020, down by 6.9pc from July-September. Total profit for 2020 also fell by 59.4pc from 2019 to Bt37.8bn.

The main reason for the drop was a fall in average selling prices in the exploration and production business and stock losses in petrochemical and refining operations, PTT said.

The price of crude fell from $67.30/bl in 2019 to $51.10/bl in 2020, it said. “Upstream business also showed a decrease, mainly from a reduction in the gas separation plant business’ selling price and the negative impact from Covid-19, as well as maintenance shutdown and a reduction in production capacity of [our] gas separation plant,” the firm said, without specifying the unit.

A global shift towards cleaner energy and transport means PTT is also aiming to stimulate non-oil growth, with plans to look at developing battery, energy storage and electric vehicle businesses. Its subsidiary Global Power Synergy (GPSC) has invested over Bt1.1bn to develop Thailand’s first semi-solid battery plant at the Mab Ta Phut industrial estate. The plant, with first-phase production capacity of 30MWh, is expected to start regular operations by this year’s second quarter, according to GPSC.