PTT of Thailand may invest $400M in RP

Thailand’s PTT Group plans to pour in as much as $400-million investments for the development of the petrochemical industry in the Philippines, a top company official said.

 “We have plans to invest in petrochemicals,” Siripong Phoungpaka, PTT Philippines Corp. president, said. PTTPC is a subsidiary of PTT Public Co. Ltd., the largest oil company in Thailand.

The PTT official said their investment in the Philippine petrochem industry will be part of the group’s short to medium-term expansion plan in the country.

He, however, declined to reveal the identity of its potential joint venture partner for the petrochem project. There were earlier reports that they are holding talks with JG Summit Holdings Corp. of the Gokongweis.

“We are still at a very sensitive stage of our discussions. We will give you details once we finalize anything,” he said.

JG Summit Holdings owns JG Summit Petrochemical Corp. which went into commercial operations in mid-1998 as the sole producer of PE (polyethylene) in the country.  

In the first year of its operations, it produced 51,761 metric tons of PE valued at P1.3 billion and sold most of it in the domestic market. 

In the polypropylene (PP) market, JG Summit Petrochem and another Filipino firm, Petrocorp., have competed with foreign suppliers for the past couple of years. Petrocorp has already grabbed 73 percent of the domestic market by offering similar products at prices at par with offers of foreign suppliers. 

Aside from the $400-million investments, he said they are also eyeing to invest up to $700 million for several natural gas projects. 

The PTT official pointed out that the expansion plans on petrochem and the  natural gas industry are still on their planning stages.

 “There is nothing definite yet. We are still studying them,” he said.

PTT is one of the country’s major sources of petrochemical feedstock. In 2006, PTT had exported more than 50,000 tons petrochemical feedstock to the Philippines.

PTT statistics showed that the Philippines is one of the top five countries for its export of plastic products. The Philippines is also one of the biggest clients of the PTT Group in terms of petrochemical. 

PTT has been active in the downstream oil sector, being the owner of the biggest handling facility in Subic Bay which is under a long-term lease agreement with Philippine Coastal Storage and Pipeline Corp. (PSCPC) and can store up to 2.4 million barrels of finished petroleum products. 

Eyeing an initial public offering (IPO) at the local stock market in the near future, PTT is expected to invest another P5 billion in the next five years to continuously expand its network by at least 10-20 service stations a year.