Blaze may slash BT600 M off year's revenue: Bangchak

business July 05, 2012 00:00


3,250 Viewed

Bangchak Petroleum estimates that the hour-long inferno at its Bangkok refinery yesterday will cost it Bt500 million to Bt600 million in lost revenue and Bt300 million to Bt400 million in earnings before interest, tax, depreciation and amortisation this y

If the company has to build a new distillation unit, this will cost up to Bt100 million and take about three months to complete, president Anusorn Sangnimnuan said.

However, its insurance covers property damage and business interruption and no significant impact is expected on its product sales to customers.

Its stock price dropped 2.56 per cent to Bt22.80.

Bangchak earned Bt5.6 billion on Bt160 billion in revenue last year.

The company informed the Stock Exchange of Thailand that the fire started at 7.20am at its refinery on Sukhumvit Soi 64. According to the preliminary investigation, the kerosene stripper in Crude Distillation Unit 3 was ignited.

The situation is under control with no reported injuries.

The company has temporarily shut down the whole refinery to investigate the cause and assess the equipment damage for about seven days.

After that Crude Distillation Unit 2 will resume operation, but the damaged unit is expected to remain offline for 30 days.

The company says it has provided |information about the incident to surrounding communities and has inspected the impact on the communities and environment.

In a separate statement, Somporn Suebthawilkul, president of Dhipaya Insurance, said Bangchak was insured for Bt23.5 billion for its assets – refineries, stocks and machinery – as well as business disruption and third-party claims worth Bt1.5 billion.

“Dhipaya is the sole insurer of Bangchak, but this incident will not dent our financial position, as this policy has been mostly reinsured by foreign insurers,” he said.

Dhipaya’s staff will soon inspect the |site and it is initially expected that within a month, the damage figure will be finalised.

The Bangchak refinery was producing 99,000 barrels per day out of total capacity of 120,000bpd.

Distillation Unit 1 has been out of use, while Unit 2 has production capacity of 40,000bpd.

The damaged Unit 3 has capacity of 80,000bpd, The repair of the damaged unit is expected to take one month.

Anusorn vowed that the company would bolster its safety measures to boost confidence of the communities.

Viraphol Jirapraditkul, director-general of the Energy Business Department, said all oil depots in Bangkok of all oil companies had safety measures in place and conducted a major drill once a year and minor ones three times a year.