Thailand: PTG unclear on renewable energy plans

Thailand: PTG unclear on renewable energy plans

SET-listed PTG Energy Plc, a fuel retailer under the PT brand, has revised a
plan to diversify into renewable power due to unclear policy direction and
the possibility of insufficient feedstock.

President and chief executive Pitak Ratchakitprakarn said recent deals to
acquire renewable power projects have failed to reach any conclusion.

In October, PTG said it planned to acquire three renewable power projects.

The plan included buying a 70% stake in two biomass projects in the
Northeast and a 50% stake in a community waste-to-energy project in the
South.

According to the plan, the company expected to have total renewable
power-generating capacity of 100 megawatts in 2017-18, Mr Pitak said.

The biomass power project in the North is also facing insufficient feedstock
supply, which, in combination with returns from the investment failing to
reach previous targets, have rendered the company unable to complete the
acquisition deal.

The waste-to-energy project in the South was delayed and still awaits a
development licence from energy policymakers.

The licence was due to be granted by the end of this year and run to 2020,
Mr Pitak said.

"Many Thai renewable power operators have to increase their power-generating
capacity through overseas projects, such those as in China and Japan, to
make up for limited domestic capacity," he said.

Moreover, the state policy to trim down the feed-in tariff paid to renewable
power operators also discourages and deters investors from investing more in
the sector, he said.

As a result, PTG's target to have a total capacity of 100MW has been revised
down in order to coordinate with current policy.

PTG yesterday estimated the average Dubai crude oil price will be in the
range of US$55-$60 a barrel next year.

It is expected plentiful supply of shale oil will weigh down market prices.

PTG announced 4.5 billion baht for its capital expenditure next year, of
which 2.1 billion baht will be allocated to increase the number of oil
stations nationwide from 1,306 units to 1,450 units.

Approximately 750 million baht will be used to increase the number of
minimarts to 80 units from 50 units, and 300 million baht to increase the
number of Punthai Coffee shops from 60 to 80.

Of the total capital expenditure, around 350 million baht has been set aside
to purchase trucks for fuel transport, as well as for mergers and
acquisitions.

Mr Pitak said oil sales volume for this year and next will grow by 30% to
2.9-3.0 billion litres, up from 2.23 billion litres in 2015.

The value of PTG's oil sales will also grow 30% to 100 billion baht by end
of this year and is expected to top 120 billion baht next year.

PTG shares closed yesterday on the Stock Exchange of Thailand at 32.25 baht,
up 25 satang, in trade worth 331 million baht.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1148561/ptg-unclear-on-renewable-en
ergy-plans

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com