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PTTGC to invest USD7.7 billion in 5 years
Updated: 2015-12-14 09:32 Source: Market Report Company share:

PTT Global Chemical, the country's largest petrochemicals producer, on 17 Nov. 2015 announced plans to invest USD7.7 billion (Bt276.8 billion) in Thailand and the United States over the next five years, as per GV.

Some USD5.7 billion will be for building a petrochemicals complex in Ohio to exploit shale-gas resources in the US state, USD1 billion for its Map Ta Phut retrofit project in Rayong, and the balance for joint-venture projects with Toyota Tsusho and Sanyo Chemical to manufacture propylene oxide and polyether polyols at the Hemaraj Eastern Industrial Estate, also in Rayong.

One of PTTGC's key strategies is to reduce external sales and exports of its upstream products, which include naptha, polypropylene, benzene and paraxylene, through building more of its own downstream plants that will use these raw materials for producing speciality and higher value-added chemical products, president and chief executive Supattanapong Punmeechaow said.

Under the Map Ta Phut retrofit project, PTTGC will convert its upstream olefins plant from using ethane gas to using naphtha instead, thus reducing its sales to SCG - the other major Thai petrochemicals group - and to export markets.

PTTGC currently has a naphtha surplus from its own usage totalling 1.4 million tonnes per year, about 80 per cent of which is sold to SCG, which has many downstream petrochemical plants. The switch of feedstock to naptha, which has a different chemical composition to ethane produced from a natural-gas separation plant, will give PTTGC's olefins factory a wider range of chemical output, enabling the company to develop more downstream petrochemical plants of its own, he said.

Among the possible new products that it plans to develop with joint-venture partners are polypropylene, acrylic acid, super acrylic polymer, styrene monomer, methyl methacrylate styrene, acrylonitrile butadiene styrene and styrene-acrylonitrile polymers, solution styrene-butadiene rubber, thermoplastic elastomers, polybutadiene , and several polymer compounds. PTTGC will also build its own plants or expand production of products such as polyethylene (PE), ethylene glycols and ethylene oxide, butadiene and polystyrene.

Supattanapong said PTTGC would channel ethane gas to its subsidiary PTT Polyethylene, in a move that that would expand its PE capacity by up to 30 %, or about 300,000 tonnes per year. "There are many investors interested in joining in our downstream projects, which will also help attract more investments to the country," he added.

Gas will continue to give a comparative advantage to PTTGC versus most other firms that use naphtha as the raw material for their petrochemical complexes, but in order to grow its output, the company has to convert some of its olefins plants to using naphtha, an oil refinery output which is easier to find, said the CEO.

Domestic natural-gas supply is expected to be stagnant or decline, after more than three decades of production in the Gulf of Thailand.

Chief operating officer Patiparn Sukorndhaman said PTTGC expected to conclude its new downstream investment plans in the third or fourth quarter of next year, and to commence production in late 2019 or early 2020. The company expects next year's petrochemical markets to perform more or less similarly to this year's, under an assumption that Dubai crude oil prices will be traded at around USD50 a barrel.

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