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Published on March 21, 2008

Bangchak Petroleum will invest more than Bt2 billion in biodiesel and ethanol production centres to lift its profile in the area of alternative fuel.

It will invest Bt1 billion to create a biodiesel production centre in Bang Pa-in, Ayutthaya, expecting to generate revenue of over Bt4 billion in 2009. Bt1 billion is earmarked for the production of 300,000 litres of ethanol.

"If the government's campaign to promote gasohol and biodiesel is not disrupted, gasohol and biodiesel consumption will account for 15 per cent of total oil consumption in 2015, up from 1 per cent last year," said company president Anusorn Sangnimnuan.

"In a way, in 2015, import substitution will be valued at Bt80 billion and we can generate another Bt20 billion from the exports of excess ethanol supply. By then, Thailand will be Asia's largest alternative-fuel producer."

Yesterday the firm signed a deal to invest in a biodiesel plant with Universal Absorbent and Chemicals. Bangchak Biofuel will be established as a 70:30 joint venture. The plant, located next to Bangchak's oil depot in the district, will supply biodiesel to the Central region, which consumes 70 per cent of total diesel in the country.

Anusorn said the centre, which can produce an average 300,000 litres of biodiesel a day, will use palm oil as the raw material. Production can start in mid-2009.

"The centre will supply 230,000 litres a day to Bangchak and the

rest to other retailers. This will

guarantee biodiesel supply to Bangchak," he said. In 2009, the output will generate Bt4 billion in revenue and substitute imports by Bt2.5 billion.

Anusorn said Bangchak was studying the feasibility of investing Bt1 billion in the ethanol plant. The company is negotiating with a few potential partners and surveying the market for the excess supply. "This plant will mainly supply ethanol to Bangchak," he said.

On pollution concerns, Bangchak in April started producing Euro IV-standard diesel and late this year the work on petrol will start, needing an additional investment of Bt1.5 billion. To comply with the higher standards, Bangchak will shoulder a higher cost - 70 satang per litre for diesel and Bt1 per litre for petrol. Refiners now enjoy a subsidy of 24 satang per litre.

Anusorn added that an increase in domestic diesel prices could be delayed following the continued recent decline in global oil prices. Retailers' marketing margin on diesel is now 10-20 satang. Bangchak has shouldered Bt100 million so far this year as losses from the retail oil business.

Meanwhile, Energy Minister Poonpirom Liptapanlop said the ministry was finding ways to help some sectors heavily affected by high oil prices, particularly the transport sector. It will also work on promoting alternative fuel consumption by widening the price gap between conventional fuels and alternative fuels.

She also insisted that two-tier liquefied petroleum gas (LPG) prices would be imposed in July to reduce LPG consumption by vehicles.

The Nation