Thai oil refiner Bangchak to buy ethanol plant to serve local demand

Construction News
Bangchak refinery, visual from Bangchak Petroleum website
Bangchak refinery, visual from Bangchak Petroleum website

Thailand’s leading renewable energy and oil refinery firm Bangchak Petroleum Pcl (BCP) plans to acquire a local ethanol production plant with total investment of 800 million-1 billion baht ($22.4-$28 million).

The plant has a daily production capacity of 150,000-300,000 litres.

“We need to boost our ethanol production capacity to serve the fast growth of gasohol in the market. Our demand for ethanol is around 700,000 litres per day and it is forecast to increase to 1 million litres in 2020,” Surachai Kositsareewong, Senior Executive Vice President, said.

BCP plans to use 400-500 million baht from its internal cash reserves and loans to fund the acquisition.

The company set aside an investment budget of 20.5 billion baht this year. It will spend around 8 billion baht on improving the refinery’s efficiency, 2 billion baht on additional 60 gas stations and 1 billion baht on improving current gas stations. The remaining will go towards new investments and acquisitions.

“We have considered stepping into oil exploration and production business for two years. However, we still cannot confirm when we can finalise the plan. It depends on the timing and the negotiation,” he said. “Additionally, we are interested in co-investing in a 50-80 megawatt wind power plant and a 30-megawatt solar farm in Japan.”

The firm projects its earnings will rise to 25 billion baht in the next five years, from the projection of 12.6 billion baht this year.

He said, the company has already submitted the filing to list its renewable power generation BCPG Pcl on the Stock Exchange in the second half of this year. Currently, it has signed the power purchase agreement to sell 282 MW, expecting to increase to 500 MW by 2020.