Thailand: BCPG close to renewable deal

Thailand: BCPG close to renewable deal

BCPG Plc, an electricity-generating arm of SET-listed oil refiner Bangchak
Petroleum Plc (BCP), is continuing expanding its renewable power portfolio
overseas, saying it is in talks with a company in an Asian country.

President Bundit Sapianchai said BCPG has earmarked a 10-billion-baht budget
for buying a stake in a 500-megawatt Asian renewable power plant.

This 10 billion baht is a part of BCPG's total capital expenditure this
year, set at 16 billion baht for 2017.

"We are expecting to close the deal and then work out details before we are
ready to disclose the information to the public by the middle of this year,"
said Mr Bundit.

This deal will help move BCPG closer to the target of having renewable power
at 1,000MW in 2020, Mr Bundit adding that with the share acquisition
strategy, it might be able to accomplish the mission sooner than expected.

The company's portfolio has 400MW of renewable power.

Once this deal is done, its renewable equity capacity will rise to 600MW.

"We will get more capacity from this share acquisition, around 200MW," said
Mr Bundit.

Last month BCPG acquired a 40% stake in the Philippines' PetroWind Energy
Inc (PWEI) through Singapore-based investment fund CAIF III Pte.

CAIF's investment was in Netherlands-based holding firm CapAsia Asean Wind
Holdings Cooperatief UA, which held the 40% in PWEI.

PWEI operates a 36MW windpower-generating plant in Nabas in the Philippines
and another 14MW project in Visayas is under construction.

At the same time, BCPG's parent firm state-majority-owned oil refiner BCP is
conducting a feasibility study for a new investment project, worth 3 billion
baht.

President Chaiwat Kovavisarach, said that the new project entails a
speciality product made from ethanol and biodiesel.

"I can only say that this new product is a high-value-added product. We
operate ethanol and biodiesel production, so instead of selling them at
cheap commodity prices we can make higher margins if we use them to source
the high-value product." said Mr Chaiwat.

The business model will be a joint venture between BCP and an undisclosed
strategic partner.

"We expect to conclude the deal within mid-2017," said Mr Chaiwat.

BCP has operated methyl ester, which is feedstock for biodiesel, with a
capacity of 710,000 litres a day and ethanol production at 130,000 litres
per day.

The project is a part of total capex this year worth 18.5 billion baht,
including 3 billion baht for 100 new petrol stations, 1 billion baht for
non-oil expansion, 5 billion for the productions repair and maintenance, 4
billion baht for exploration and production activities, 3 billion baht for
the new venture and the rest for oil refinery upgrades and capacity
expansion.

"The oil refinery upgrading and expanding capacity is actually a major
investment, requiring around $300-350 million but the investment is spread
out over four years starting from this year, " said Mr Chaiwat.

"Most oil refining facilities have old equipment and need major revamps and
upgrades to improve production efficiency," said Mr Chaiwat.

The expansion will boost 23% oil refine output from 111,000 barrels a day to
135,000 barrels per day, and replace the old continuous catalytic
regeneration in order to improve refined oil output quality.

BCPG shares closed yesterday on the Stock Exchange of Thailand at 12.90
baht, up 20 satang, in trade worth 85.5 million baht.

BCP shares closed at 33.50 baht, down 25 satang, in trade worth 239 million
baht.

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Link to Original Article:
http://www.bangkokpost.com/business/news/1202589/bcpg-close-to-renewable-dea
l

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John Diecker
APT Consulting Group Co., Ltd.

www.aptthailand.com