Some interesting numbers come from Thailand, where Bangchak Petroleum Plc plans to invest between 900 million and 1 billion baht (€20.5-22.8/$27.8-30.9 million) to build a biodiesel plant by the end of this year.Patiparn Sukorndhaman, Bangchak's senior executive vice-president, told reporters that biodiesel produced locally costs 70 satang (70 cents) per litre less than conventional diesel. Since 2005, diesel has seen a continuous price hike, with the government feeling the pinch of subsidizing the fuel. First-generation biodiesel being competitive at current prices, Sukorndhaman thinks the alternative fuel will become increasingly popular locally.
Starting in April next year, the Thai government will call on local oil companies to switch all their diesel products to B2, a blend of 2% biodiesel and 98% diesel fuel. The move would encourage and build up confidence among motorists to use the much cheaper B5 fuel currently marketed by Bangchak Petroleum. Bangchak Petroleum offers B5 at 300 of its fuel stations and is planning to increase the number to 500 before the end of 2007.
A recent project coordinated by the Thai government and executed by Bangchak Petroleum in the city Chiang Mai, saw 1,300 public-transport buses utilizing unsubsidized B2, which was 0.5 bath per liter less costly than diesel (overview of this and other projects).
The biodiesel currently produced by the company relies on waste vegetable oils. Bangchak Petroleum has opened units to buy used vegetable oils from towns and communities for the production of biodiesel at its oil refinery in Sukhumvit. It also sources waste oil from various markets in Bangkok.
Bangchak Petroleum's new plant, with a daily production capacity of 300,000 litres per day (78,000 gallons), will use waste and palm oil. It is scheduled to be completed within 20-23 months. The plant would be located near Bangchak's existing oil storage facilities in Bang Pa-in, Ayutthaya (see map, click to enlarge), to save the company's logistics cost:
Bangchak is now the leader in Thailand's biodiesel market, with a share of 78.6% of total market volume of 30 million litres per month, followed by PTT Plc with 21.4%. Patiparn said the company's biodiesel production output rose by 47% to 28.7 million litres per month over the past six months.
Of the total investment in the new plant, up to 300 million baht would come from the company's capital and the rest from loans, which would lift its debt-to-equity ratio to two times from 0.6 currently.
Patiparn said Bangchak forecast its total revenue would grow 15% this year to 107.57 billion baht although its gross refining margin would decline to below US$2.90 per barrel this year on average compared to more than $3 per barrel on average last year.
The revenue growth would be contributed by the company's promising exports of fuel oil, which account for 30% of its total output, to China. This year, it will ship around 25,000 barrels per day of fuels to China, almost double the 14,000 barrels per day last year. The export price is now around $8-10 per barrel.
Nevertheless, the exports would have to be terminated in the fourth quarter when its product quality improvement (PQI) facilities have been completed. The facilities will transform fuel oil into more lucrative lighter fuel products including gasoline and diesel.
Bangchak will shut down two-thirds of its production capacity for 12 days in February next year, which will cause its capacity to decrease to 40,000-50,000 barrels per day from 70,000 barrels currently.
Bangchak now ranks fourth in the local fuel retail market, with a 12.5% share or 180 million litres per month, after PTT (32.9%), Esso (17.5%), and Shell (15.9%).
The company is also investing in the production of ethanol made from cassava.
Posts
