NaturaI gas-based petrochemical industry
to be new key strategy
Bangkok Post, 22 September, 2004
Yuthana Praiwan
Busrin Treerapongpichit
The development of natural gas-based petrochemical industry will be actively promoted as the key energy strategy to add value to Thailand 's existing energy resources, according to Energy Minister Prommin Lertsuridej.
Speaking yesterday at Thailand Focus 2004, Dr Prommin said Thailand had plentiful reserves of gas that were enough to supply the country's need for electricity production for more than 30 years.
The total value of the gas reserves was estimated at US$250 billion but the amount could be raised by $250 million if 10% of the separated gas was used as feedstock for petrochemical production and 90% in electricity production.
More importantly, natural gas-based petrochemical development will also help strengthen the country's five main industries-textiles, automobiles, electronics, construction materials and packagingbecause petrochemical outputs will be used as their raw materials.
"Given our fast-growing domestic demand, increasing transport costs and global security considerations, the case for developing our petrochemical industry based on our own gas has become com mercially compelling," said Dr Prommin. As the prices of oil climb higher compared with that of gas, Thailand gas-based petrochemical production will become more competitive.
For instance, oil prices rising from $25 to $35 per barrel would actually increase the competitiveness of gas-based petrochemicals by more than 30%.
Dr Prommin said Thailand was on the verge of its third wave of the development of the petrochemical industry.
The main objective of development over the past 25 years was to substitute for imports.
In another development, PTT Plc president Prasert Bunsumpun said the planned merger of National Petrochemical Plc and Thai Olefins Plc, both upstream petrochemical subsidiaries of PTT, would have to be completed by next year, as would the consolidation of PTT's other two subsidiaries -Rayong Refinery and Star Petroleum Refinery.
PTT's other subsidiaries with similar businesses will also be merged within the next two to three years.
The combined market capitalisation of PTT's businesses listed on the stock market will be raised to one trillion baht next year when Thai Oil Plc is listed by the end of this year.
Next year, he said PTT would invest $500 to $700 million to develop terminals and facilities to prepare for imports of liquefied natural gas (LNG).
The project's capacity would be sufficient to serve 400-600 million cubic feet per day (mcfd) or 3-5 million tonnes per year.
The project, scheduled to be completed in 2010, would help relieve the local gas supply shortage due to full utilisation of PTT's gas pipeline. Gas demand is expected to grow by 6-7% a year to reach 5,000 mcfd in 2010.
Chumpol NaLamlieng, the president of the Siam Cement Group, said Thailand should try harder to co-operate with Asean countries in forming a single market to compete with China and India in the next 10 years.
"The trend is clear that businesses which have competence in global or regional competition will be toward consolidation scheme."
He said Thailand still lagged in infrastructure and educational development. The government's commitment of billions of baht to infrastructure development was a step in the right direction while human resource development was as crucial an issue to strengthen Thailand in the global arena, he added.
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