MOSCOW (MRC) -- State-owned Thai oil and gas company PTT Pcl said it would cut its investment budget across the group by 10-15% this year and some projects will be delayed as partners face challenges from the coronavirus, according to Hydrocarbonprocessing.
Chief Executive Auttapol Rerkpiboon, who took up the post last month, said the PTT group faced "double effects" from the oil price slump and the coronavirus outbreak.
"All the projects that have been approved will go forward, but we will review and prioritize those in the pipeline," he told reporters.
PTT has six flagship companies including PTT Exploration and Production Pcl, oil refiner IRPC Pcl and electricity firm Global Power Synergy Corporation Pcl and had planned to invest 250 billion baht ($8.08 billion) across the group this year.
"Of the 250 billion, we expect a reduction of around 10% to 15%," Auttapol said. That would be a reduction of between 25 billion baht and 37.5 billion baht (USD808 million-USD1.2 billion).
For PTT alone, the company will reduce investment this year by 15 billion baht to 54 billion baht, he said.
Sales at its upstream arm, PTTEP are expected to drop by 7% and gas volumes are likely to decline by up to 10% this year, the CEO said, adding that he expects PTT’s refineries to have a utilization rate of around 90% to 100%.
The company has 66 billion baht from corporate bonds ready if needed, he said, but does not expect to use the entire sum and the company will maintain a debt-to-equity ratio below one.
Its debt-to-equity ratio in the first quarter was 0.55.
Auttapol said PTT would also focus on expanding its gas business overseas and position itself as a liquefied natural gas trading hub for the region as the Thai government liberalizes the gas market.
PTT’s gas business faced new competition in Thailand after local rivals Gulf Energy Development Pcl and B. Grimm Power Pcl received government licenses to import LNG.
Prior to 2017, PTT was the country’s sole LNG importer.
As MRC reported before, PTTGC America and Daelim Chemical USA, equal partners in their long-planned PTTDLM petrochemical project in Mead Township, Belmont County, Ohio, have recently delayed making a final investment decision (FID) on their multi-billion-dollar petrochemical project, originally expected in the middle of 2020.
We remind that PTT Global Chemical (PTTGC) fully restarted its No. 2 cracker in Map Ta Phut in early March,2020, after a planned turnaround. The company started resuming operations at the cracker by end-February, 2020. The cracker was shut for maintenance on January 20, 2020. Located at Map Ta Phut, Thailand, the No. 2 cracker has an ethylene production capacity of 400,000 mt/year. The company also operates No. 1 cracker at the same site with a capacity of 515,000 tonnes of ethylene and 310,000 tonnes of propylene per year, which was also shut on 23 January, 2020, for a 40-day turnaround.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
PTT Global Chemical is a leading player in the petrochemical industry and owns several petrochemical facilities with a combined capacity of 8.45 million tonnes a year.