The Energy Ministry has asked refineries to boost their LPG (liquefied petroleum gas) production capacity in order to offset a supply shortage following the temporary shutdown of PTT's gas-separation plant Unit 5 in Map Ta Phut, Rayong.
Chainoi Puenkosum, director of Energy Fund Administration Institute (Public Organisation), said after a meeting between with the refineries and related parties that the ministry had requested the cooperation of the refineries in reducing their LPG supply to the petrochemical sector, which will also be asked to use naptha as a raw material, instead of LPG.
The meeting was held to seek ways to deal with the impact of the shutdown following a lightning strike on the facility.
Unit 5 of PTT’s gas-separation plant is expected to take between three and five months before it can resume operation.
The shutdown will result in the loss of LPG supply of between 70,000 and 75,000 tonnes per month, which represents up to 25 per cent of the country’s overall production capacity of 300,000 tonnes.
Around 220,000 tonnes of the normal production are from PTT’s gas-separation plant units, and the rest from the refineries.
Chainoi added that the private refineries would consider the request and submit details of their plans to boost LPG production to the ministry on Monday.
PTT, meanwhile, will boost its LPG imports by 40,000 tonnes per month, from the present 140,000 tonnes, and cut the LPG supply to the petrochemical sector by 30,000 tonnes per month.
The global LPG price, including transportation costs, is US$900 (Bt28,150) per tonne, while the domestic price is $333 per tonne. This means the Oil Fund will have to subsidise the price for PTT at $567 per tonne.
PTT’s chief financial officer, Surong Bulakul, said the group’s six refineries were willing to cooperate to solve the problem.
PTT has yet to evaluate the financial impact of the incident on its business, he added.
PTT Global (PTTGC), meanwhile, has estimated the maximum preliminary impact to its net profit at about Bt400 million per month following the temporary shutdown of its parent’s Unit 5.
On Wednesday morning, lightning struck the waste-heat recovery unit at the Map Ta Phut facility, which supplies natural gas to PTTGC’s I4-2 plant.
The PTTGC plant has an olefins production capacity of 450,000 tonnes per year.
PTTGC has drawn up a preliminary mitigation plan, coordinating with related parties including PTT to source natural gas within the group and/or from other sources.
The listed company has also reallocated natural gas, especially ethane, among its olefins plants in order to maximise value, and reallocated olefins products to efficiently operate both upstream and downstream products to minimise the impact of the shutdown on its performance and customers.
PTTGC estimated the maximum preliminary impact on its net profit at around Bt400 million per month in a filing to the Stock Exchange of Thailand on Thursday.
The company has property damage and business interruption insurance policy, and both it and the insurer are in the process of appraising the extent of a claim for damages.
PTTGC will also consider additional mitigation approaches in order to reduce the impact, it said in the filing.
In a separate filing to the exchange, PTT said it also had both property damage and business interruption coverage. The company and the insurer are appraising the potential claim value.
The share price of PTTGC yesterday dropped 0.36 per cent to close at Bt70, while PTT’s stock dipped 1.52 per cent to close the day at Bt324.