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Petroleum Institute seeks merger

Mar 25. 2016
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By THE NATION

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THE PETROLEUM Institute of Thailand (PTIT) proposes a merger of the Fuel Pipeline Transportation Co (FPT) and the Thai Petroleum Pipeline Co (Thappline) to make the country’s network of fuel-pipeline systems more efficient.

Speaking at an international conference titled “Sustainable Energy and Technology Asia”, Siri Jirapongphan, executive director of the PTIT, urged the Energy Ministry to become an intermediary for negotiations on the merger of these two companies.

The proposed merger could see the government take part in or invest in the pipeline network through an infrastructure fund.

FPT operates pipelines from Bangchak Petroleum’s refinery to Ayutthaya and Saraburi provinces, while Thappline operates pipeline systems from refineries in Rayong to Pathum Thani. Merging FPT and Thappline could enhance investment for the efficient extension of pipelines into the North and Northeast as all refineries would be able to deliver fuel to customers in the provinces quickly and safely with lower costs, Siri said.

In the future, the pipeline systems may be extended to connect with Thailand’s neighbouring countries including Myanmar, Laos and Cambodia, which could lead Thailand to becoming the regional centre of fuel transport, he said.

Previously, the PTIT studied the efficiency of oil-product transport and found that trucking fuel to Lampang in the North totalled 120 million kilometres per year. If fuel transport were shifted from trucks to pipelines, the distance would be reduced to 50 million kilometres per year with consequent lower costs.

“The government should not look at only return on investment for a particular project. Instead, it should look at the country’s overall economic advantages. Having a single pipeline network would improve transport efficiency, which could lead to gains for consumers in the provinces and neighbouring countries,” Siri said.

Thailand could become the centre for fuel transport through its pipeline systems, while service providers could earn higher return on investment once fuel usage increases, he said.

 

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