PTT will hold a 40-per-cent stake in PTT Phenol, while Aromatics and PTT Chemical will take 30 per cent each, according to a report the company filed with the Stock Exchange of Thailand (SET) yesterday.

The national oil and gas company will invest $56.7 million in the project, while Aromatics and PTT Chemical will invest $42.5 million apiece.

The rest of the funds will come from loans, which mature in 13 years. The funding includes $158 million in long-term loans and $50 million in working capital facilities, according to the statement.

Construction will likely start late this year or early next year and the plant is scheduled to start operations in 2008, a PTT investment relations official told Dow Jones Newswires.

The plant, in the eastern province of Rayong, would have an annual production capacity of 200,000 tonnes of phenol and 125,000 tonnes of acetone. Acetone is a by-product of phenol production.

"This project is expected to generate satisfactory returns and fits PTT's strategy to add value to its petrochemical value chain [upstream and downstream], by using propylene and benzene products from PTT's petrochemical affiliates as feedstock to produce phenol," the company said.

The three firms have entered into a "shareholders' support agreement", which requires shareholders to provide financial support to the project according to their stake should there be any cash deficiency during construction.