PTT to sell businesses under revamp
LEADING energy conglomerate PTT plans to restructure its petrochemical operations in moves that would also see the sale of its propane and bioplastic business chains to subsidiary PTT Global Chemical, chief executive Tevin Vongvanich said.
The proposal would be put to shareholder meetings in April, Tevin said yesterday.
“PTT Plc also will change our business focus to energy security, with investments in infrastructure for gas pipelines, LNG (liquefied natural gas) operations, oil and gas exploration, and will partner with our subsidiary for investment in mega-projects,” he said at press conference yesterday.
Under the business restructuring, PTT Plc will sell to PTT Global Chemical its major stakes in six petrochemical firms: HMC Polymer Co Ltd, PTT Asahi Chemical Co Ltd, PTT MCC Biochem Co Ltd, PTT Polymer Marketing Co Ltd, PTT Polymer Logistic Co Ltd and PTT Maintenance and Engineering Co Ltd. It will also sell its stake in the PMMA project of PTT PMMA Co Ltd, according to a filing with the stock exchange.
Subject to approval of the restructuring proposal by the shareholders of PTT Plc and PTT Global Chemical, the process may be completed by the end of the year, Tevin said.
“The restructuring is part of our business strategy to expand our investment in high technology, value-added products for propane and bio chains for the long term.
“PTT will also have a clearer business focus on oil and gas and also expand investment into innovative businesses that relate to oil and gas, including new S-curve businesses by finding startups with innovative products, for our business expansion,” he said.
S-curve generally refers to new drivers for higher growth as an enterprise enters or expects to enter maturity or a decline in its existing businesses. For example, the businesses linked to the electricity chain can include other energy operations, robotics, and digital enterprises.
PTT’s board also approved a five-year investment plan for Bt338.84 billion in spending to 2021. Of this, more than Bt100 billion will be invested in the country’s Eastern Economic Corridor over the five years in line with the government’s policy to promote the investment in the EEC with tax incentives, Tevin said.
Tevin said the board also approve a budget provision of Bt198.61 billion on top of the Bt338.84 billion, five-year investment. These funds will go towards investment in oil operations where concessions are due to expire, S-curve businesses, investment in LNG operations for imports that secure the country’s needs for the fuel, among others potential businesses that generate high returns for the long term.
The company has signed long-term contracts – of up to 20 years - to import a combined 3 million tonnes of LNG from BP, Shell, and Petronas. The company also is negotiating with PTT Exploration and Production Plc to import LPG from its plant at Mozambique.
In line with the long-term plan for LNG imports, Tevin said that the company would build a second LNG terminal for Bt38.17 billion.
The existing terminal has a capacity of 10 million tonnes, which will be expanded to 11.5 million tonnes in 2019.
The second terminal will have a capacity of 7.5 million tonnes, with construction due to be completed in 2022.
On the outlook for this year, Tevin forecasts the oil price will stable at average of US$50 per barrel, compared with an average US$40.9 last year.
The LNG price would rise from last year’s levels. Such gains would drive strong business growth this year.
