Thai Oil Plc (TOP), the country’s largest oil refinery by capacity, plans to allocate capital spending worth US$1 billion to expand its businesses between 2023 and 2025, with half the budget going to the Clean Fuel Project (CFP).
Under the CFP, the company wants to increase its oil refinery capacity to 400,000 barrels a day, up from 280,000 now, and upgrade fuel oil to products with higher value, including diesel and jet fuel, said chief executive Bandhit Thamprajamchit.
The CFP, located in Sri Racha district of Chon Buri, is scheduled to start operations in 2025.
It will produce cleaner diesel to meet the higher environmental emission standard Euro 5, scheduled to be enforced in Thailand from Jan 1, 2024.
The project will also pave the way for TOP to convert gasoline into a raw material for making plastic pellets in the petrochemical industry.
This is part of the company’s plan to deal with the disruption caused by the shift towards electric cars, said Mr Bandhit.
Some $270 million of the capital spending will fund the second-phase development of an olefins cracker in Indonesia, operated by PT Chandra Asri Petrochemical Tbk (CAP), Indonesia’s largest petrochemical producer, he said.
TOP holds a 15% share in CAP.
The Indonesian company is waiting for a final investment decision to push ahead with the second-phase development of an olefins cracker, which requires $5 billion investment.
The new facility will double olefins and polyolefins production capacity to 8 million tonnes a year.
Mr Bandhit said the company plans to spend $120 million enhancing machinery efficiency and adding sales offices in Indonesia, Vietnam and India.
The remaining $110 million will go to new businesses, co-developed by TOP and startups through a capital venture fund overseen by TOP Venture Co.
TOP is currently conducting a feasibility study on disinfectant and surfactant manufacturing.
The company will make the final decision on this new business in terms of investment value, partners and production capacity within this year, said Mr Bandhit.
Disinfectants and surfactants are value-added products, with a global market value of $50 billion a year, he said.
The development of the two products follows the production of linear alkyl benzene (LAB) by the TOP subsidiary Labix Co.
LAB is a key raw material for making detergents and other cleaning products.
TOP shares closed on Wednesday on the Stock Exchange of Thailand at 52.25 baht, down 25 satang, in trade worth 667.6 million baht.
