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Published on September 28, 2007

"We're confident we can achieve that sort of revenue and net profit in the coming year, due mainly to our production-capacity expansion," managing director Viroj Mavichak said yesterday.

The Kingdom's largest oil refiner has scheduled a shutdown of its CDU-3 from October 6 to December 10 for major maintenance and a tie-in with its debottlenecking project.

The expansion will boost the company's total refining capacity from 225,000 barrels per day to 275,000bpd, meeting rising demand for petroleum products in the future.

"If the average gross refinery margin is about US$5 (Bt171) per barrel, we'll increase our profit $250,000 next year," he said.

The refinery margin this year was forecast at about $6 a barrel on average, while the average margin in the first half was $9.70.

Thai Oil's net profit reached a historic high of Bt16 billion last year.

It will also revamp the mixed-xylenes (MX) unit of its Thai Lube Base unit in next year's first quarter.

Thai Lube Base has total production capacity of 72,000 tonnes a year for MX and 348,000 tonnes a year for paraxylene (PX).

After the MX unit's maintenance and expansion, its production capacity will rise to 900,000 tonnes a year, of which 489,000 tonnes will be PX, 90,000 tonnes MX, 177,000 tonnes benzene and 144,000 tonnes toluene.

To cushion earnings from the shutdown, Thai Oil has been stockpiling products and purchasing feedstock from abroad to feed into its crackers, in order to ensure sufficient finished oil products for customers.

It also imports MX to produce PX at Thai Lube Base's plant at a higher intake, to supply additional feedstock to Thai Oil.

The plan will support the company's operation to run at 68.2 per cent of overall capacity next quarter.

Commercial manager Pongpun Amornvivat said the Dubai crude-oil price was expected to be at the $65-a-barrel level next year.

Global demand will grow from 1.7 million bpd to 2.1 million bpd. Almost half of total demand will come from Asia, mainly China and India, he said.

Regional refineries should still maintain high performance, with supplies tight from expected delays or cancellations of capacity expansions, due to high construction costs.

Consumption of liquefied petroleum gas in the first seven months was up 14.1 per cent year on year, due to robust demand from transportation and industry and the domestic price subsidy, he said.

Petrol prices will fall next quarter in line with crude-oil prices, but gasohol consumption should continue its rising trend, due to price incentives.

Diesel consumption dropped slightly, due to sluggish industrial performance and high prices.

Despite poor tourism growth, jet-fuel demand in the first seven months rose 9.7 per cent year on year, due to Suvarnabhumi Airport, he said.

Chalida Ekvitthayavechnukul

 The Nation