Energy giant will divest some shares in SPRC, reduce dominance
The National Energy Policy Council (NEPC) yesterday passed a resolution calling for PTT to spin off its natural-gas-transmission business and set up a subsidiary to run its pipelines, according to Energy Ministry permanent secretary Areepong Bhoocha-oom.
The giant energy company will also have to allow third parties to use its gas pipelines.
The NEPC also approved a reduction in the number of refineries in which PTT holds stakes. This task also has to be completed by mid-2015.
According to yesterday’s resolution, PTT has to spin off its gas-transmission business from it gas procurement and distribution businesses. It has to set up the wholly owned company to run its pipelines by next June. Then the Finance Ministry will consider holding shares in this new subsidiary.
The meeting also approved tax and fee waivers for PTT’s transfer of assets to this new company.
Initially PTT will own 100 per cent of the subsidiary before the ministry acquires 25 per cent later, Areepong said. He confirmed that the gas-pipeline subsidiary would not be privatised.
Areepong said the NEPC also considered preparations for Star Petroleum Refining (SPRC) to list on the Stock Exchange of Thailand. It gave the nod to the third version of a draft amendment of the contract between the Energy Ministry and SPRC involving the construction and operation of refineries.
As part of the contract, PTT will reduce its shareholding in SPRC by offering shares amounting to at least 30 per cent of SRPC’s total registered capital to the public. Chevron South Asia Holdings will still hold 64 per cent of SPRC. PTT currently holds the remaining 36 per cent.
SRPC will also have to begin trading on the SET by the second quarter of next year or within six months of the signing of the Energy Ministry-SPRC contract. The move is aimed at curtailing PTT’s domination of the wholesale business.
National Council for Peace and Order chief General Prayuth Chan-ocha, who chaired the NEPC meeting, said the May 22 coup put the country back at Square 1 in terms of energy policy. All such policies the junta considers “proper” will be kept, but everything else will be revised.
Speaking at a separate event, Bangchak Petroleum president Vichien Usanachote said the upcoming National Reform Council, which will also undertake energy reform, should clearly define the role of the state in connection to energy security. Moreover, the government should seriously promote alternative energy.
He added that energy reform should not focus on price reductions, which would benefit only particular groups of people and encourage inefficient energy use.