Failure to acquire Thappline
PTT says it will have to establish a new company to invest in and manage oil pipelines serving the Northeast and North if it fails to take majority control of Thai Petroleum Pipeline (Thappline). PTT chief operating officer Nuttachat Charuchinda said the
PTT and Thai Oil jointly own 40 per cent of Thappline, but its other shareholders are not interested in such a pipeline project, because of the estimated low rate of return of 11 per cent. Therefore, PTT wants to boost its shareholding in Thappline to at least 75 per cent to have the biggest say, by purchasing stakes from other shareholders. However, the negotiations for this are not complete.
PTT is ready to invest in the installation of the pipelines to the two regions to serve the government’s policy of building key energy infrastructure, despite the expected low investment return, Nuttachat said.
It is estimated that the installation of Saraburi-Phitsanulok-Lampang and Saraburi-Nakhon Ratchasima-Khon Kaen pipelines will require investment of Bt17 billion.
He said that if PTT failed to reach an agreement with Thappline’s other shareholders to buy their shares, it would have to set up a subsidiary to invest in the pipelines by itself and connect them with those of Thappline. PTT can afford this option.
PTT’s senior executive vice president for the oil business unit, Sarun Rungkasiri, said the company had proposed acquiring additional shares in Thappline many times but the shareholders had declined to sell. They were at the same time not eager to increase capital in Thappline to invest in pipelines to the Northeast.
Thappline has registered capital of Bt8.479 billion. Its major shareholders are PTT, Thai Oil and Caltex (Chevron). The company operates three pipeline systems: Sri Racha-Saraburi, a Suvarnabhumi Airport dedicated line, and the Map Ta Phut-Sri Racha feeder line.
