"Analysts predict Thailand will need new production capacity of 250,000 barrels a day to meet domestic demand three years from now," IRPC chief planning and administration officer Suphon Tubtimcharoon said yesterday.

The investment by IRPC - formerly Thai Petrochemical Industry - will boost its oil-refining capacity to 260,000 barrels a day, from 215,000. "We hope our investment will support the country's demand a few years from now," he said.

Suphon said IRPC expected to start construction at the beginning of next year and take 30 months to complete the facilities. Details will be finalised in the third quarter.

Meanwhile, the company will sign a three-year contract to sell one million litres of diesel and petrol per month to Xishuangbanna Gas and Petroleum Industrial in China's Yunnan province. The deal should generate annual revenues of Bt200 million. It expects the order will rise to 5 million litres a month, worth about Bt90 million monthly, in the next three years, thanks to the completion of infrastructure linking Chiang Rai to southern China.

IRPC will also sign a contract to purchase natural gas from PTT. It will use the gas instead of fuel oil at its 200-megawatt power plant in a move expected to reduce monthly costs by about Bt6 million.

Suphon said IRPC's board was committed to generating at least as much revenues this year as last. Income for 2006 is expected to come in at about Bt200 billion.

It is targeting a net profit of at least Bt12 billion this year.