FAR EAST: PTTGC seeks co-investment with Sinochem

He made the remark on Tuesday (14 May 2013) before going to China to discuss a possible collaboration between PTTGC and Sinochem International. The two companies recently signed a memorandum of understanding on a joint feasibility study on co-investment in petrochemical business focusing on polyurethane and bio-based chemicals to serve the growing auto, construction, and electronics industries.

PTTGC has already piloted exporting its products to test China's market. If they are enthusiastically welcomed, this might lead to joint investment between PTTGC and Sinochem to set up a petrochemical plant there.

Last month, PTTGC signed a tentative deal with oil and gas company Pertamina to develop a petrochemical complex in Indonesia worth up to Bt150 billion. The deal will see them determining the framework of their collaboration to study details of investment and a business plan, and to set up a joint venture to establish the petrochemical facility. The complex will comprise a refinery, an olefin plant with capacity of 1 million tonnes per year, and a downstream polymer plant, all to serve the fast-rising demand of Indonesia's market.

The cost of establishing the complex will be US$4 billion to $5 billion (Bt119 billion to Bt149 billion). Indonesia's Pertamina will own 51 % of the project, while the Thai partner will hold the remainder.

Anon said PTTGC was in talks with companies with the potential to become a third strategic partner in this Indonesian project. PTTGC will allocate a minor part of its 49 % share in the project to this third strategic partner. It hopes to wrap up the deal soon with this third partner before signing the tripartite joint-venture agreement in December.

He said Pertamina welcomed the plan to invite a third partner into the project. The project demands massive investment and the development should be completed by late 2018. The joint venture serves part of PTTGC's strategy of boosting its strength by expanding its regional market. It is possible that in the future PTT Group and Pertamina will expand their collaboration in other business areas.

Meanwhile, Pailin Chuchotta-worn, CEO and president of PTT, said the group expected to finish studying a plan to set up an oil refinery and petrochemical complex in the coastal province of Binh Dinh, Vietnam, in one year. He added that if the study found it was a worthwhile investment, it would not be difficult to draw foreign partners to invest jointly in the project. The refinery is expected to have capacity of 600,000 barrels per day.

Source: Daily "The Nation", Bangkok; 16 May 2013

(Syed Rashid Ali, Karachi, Pakistan)