GPSC seals the deal to buy ERU from Thaioil worth USD757 million using petroleum pitch to produce up to 250 MW of power.
GPSC secures a contract to buy ERU from Thaioil worth USD757 million to generate 250 MW of power and 175 tons per hour of steam to supply for Thaioil’s Clean Fuel Project (CFP), responding to an environmental resolution by shifting to use petroleum pitch from oil refinery process as an energy resource supporting country’s innovative and technology development plan with the expecting commercial operation date (COD) in Y2023.
Today (May 10, 2019) Dr. Siri Jirapongphan, Energy Minister, presided over the sales and purchase agreement signing ceremony between Thai Oil Public Company Limited (Thaioil) and Energy Recovery Unit Company Limited, a subsidiary of Global Power Synergy Public Company Limited (GPSC) Energy Recovery Unit (ERU) which is part of the Clean Fuel Project (CFP) of Thaioil.
Dr. Siri said this is a pilot project that has applied state-of-the-art and environmentally friendly technology by reducing the major reliance on fossil fuels and shifting to use petroleum pitch from oil refinery process. It will also help increasing value-added by the cooperation of the expertise in refinery and power businesses to increase the country’s effectiveness in power generation..
Mr. Chansin Treenuchagron, President and Chief Executive Officer of PTT Public Company Limited said PTT has been operating several petroleum-related business, ranging from upstream operations to downstream operations by investing through the company’s flagships in order to strengthen the country’s energy security and increase the national competitive advantage. This latest cooperation between Thaioil, the refinery and petrochemical flagship, and GPSC, the power and utilities flagship of the group will enhance synergy among PTT Group. This ERU project will support both companies’ core businesses as well as increase efficiencies in power generating and oil refinery operations of PTT Group, supporting to the development of the Eastern Economic Corridor (EEC), as part of the “Thailand 4.0”.
Mr. Atikom Terbsiri, President and Chief Executive Officer of Thai Oil Public Company Limited (Thaioil), said “The company’s shareholders had approved during the extraordinary general meeting last year to invest in the Clean Future Project worth USD4,825 million to increase company’s refining capacity from 275,000 barrels per day to 400,000 barrels per day. The investment included the developments of new refinery projects such as 4th refinery unit, which uses Hydrogen to crack heavy crude oil into light crude oil (RHCU) and the Energy Recovery Unit (ERU), which will produce power and steam to meet rising demand of CFP project.
“During the development of the CFP project, the company had plan to seek for new investors to invest in ERU to help reducing the investment cost instead of investing by itself in the whole CFP project. Then, we found that GPSC is the appropriate company with strong experience to invest in ERU as it has strong knowledge in power generation as well as firm expertise in oil refinery business.”
“GPSC’s investment in ERU will help to reduce investing burden of Thaioil in CFP project by 15% whilst improving Thaioil’s flexibility to effectively invest in other new projects in the future. It will also increase the return of investment in CFP while allow the company to maintain CFP’s and ERU’s effective operation,
Mr. Chawalit Tippawanich, President and Chief Executive Officer of Global Power Synergy Public Company Limited (GPSC), the innovative power flagship of PTT Group, said this is the Agreement that the company will purchase ERU from Thaioil with the capacity to produce 250 MW of power and 175 tons per hour of steam that is worth USD757 million, or around Baht 24,113 million. The expecting asset transfer of the ERU is due in Y2023. In this cooperation, GPSC will operate through its owned subsidiary, which will make the down payment to Thaioil according to the construction progress. The down payment will be around USD138 million, or around 20% of total investment budget, paid in the first 4 years (2019-2022). The rest 80% of investment to be paid by Y2023 to Thaioil will be from loan financing.
Mr. Chawalit said this is the project that will enhance the company’s opportunity to further grow by diversifying in using new and different power generating resources that will further develop the company’s power generating business in the future with more experience in managing several power resources. By using the expertise of GPSC, as a power flagship of PTT Group, it will support the country’s energy security.
“In order to reduce cost of CFP, Thaioil has been looking for a potential investor and GPSC is the one that has been trusted to help developing the ERU. This is one of important projects in GPSC and Thaioil that use high-technology and innovation to optimize power generating resources in an eco-friendly way by making use of petroleum pitch. According to the ERU, the petroleum pitch will be upgraded by cracking away Sulfur dioxide and transform it into a fuel which is used as a power generating fuel to produce electricity and steam. This is an innovation that will be used in developing new technique to produce power which would be widely used in Thailand and other countries in the future,” said Mr. Chawalit.