Thai Oil Plc will launch its second ethanol plant - a Bt1.5-billion facility in Tak province's Mae Sot district - with partners Padaeng Industry Plc (PDI) and Petrogreen Co Ltd.

Thai Oil (TOP) told the Stock Exchange of Thailand yesterday that it signed the joint venture agreement on Monday to set up Measod Clean Energy to build and operate the plant with a capacity to produce 100,000 litres of ethanol per day from sugar cane.

Construction will take about two years and the plant will start commercial operations in 2009, said Viroj Mavichak, Thai Oil's managing director.

Thai Oil's first ethanol plant will produce up to 500,000 litres of ethanol per day from tapioca. It is expected to be completed by the middle of 2008 at a cost of US$150 million (Bt5.6 billion).

"Both projects will help accelerate ethanol production to meet the demand in the country. These projects will also help support the government's energy substitution policy," Viroj said.

Thai Oil, the country's largest petroleum oil refiner and supplier, owns 30 per cent of Measod Clean Energy while PDI and Petrogreen own 35 per cent each.

Thai Oil last month declared an interim dividend of Bt1.50 per share.

Viroj said dividends would be equivalent to 29 per cent of net profit after deductions for legal reserves, which is higher than the company's policy of distributing annual dividends of at least 25 per cent of net profits.

Thai Oil's first-half net profit soared to Bt10.97 billion, from Bt3.75 billion in the first half of 2005, supported by a strong gross refinery margin, the result of surging product prices, and high refinery throughput of 108 per cent.

Among developments contributing to the good financial results was the hot-oil project at its crude distillation unit (CDU-1), which raised refining capacity by 5,000 barrels per day.

CDU-1 is one example of the hydrocarbon management synergy between Thai Oil and its subsidiary, Thai Lube Base Plc.

Thai Oil plans to join next year's bidding by independent power producers for the construction of a 700-megawatt power plant proposed by the Electricity Generating Authority of Thailand.

As of June 30, Thai Oil Group had consolidated assets of Bt127.74 billion, liabilities of Bt57.48 billion and shareholders' equity of Bt70.26 billion.