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Thappline tipped for fuel lines

Thai Petroleum Pipeline is the most likely choice as the investor in planned pipelines to the North and Northeast aimed at cutting the logistics costs and carbon emissions of oil transport. An Energy Ministry source said that at the meeting yesterday of the Petroleum Institute of Thailand (PTIT), Energy Business Depart-ment and petroleum retailers, three financing options were proposed, including investment by Thai Petroleum Pipeline (Thappline).

At the discussion, PTIT presented its feasibility study on the fuel-pipeline systems from Saraburi to Lampang in the North and from Saraburi to Nakhon Ratchasima in the Northeast, with a combined length of 958 kilometres.

The study suggested that Thappline should develop the project through fund mobilisation from the public and supporting measures from the government, including land expropriation, revision of excise taxes and soft loans. Without any incentives, the project would not be interesting to a company, which asks for a return on investment of 15 per cent while the project is estimated to generate only 12 per cent.

"Thappline refuses to invest in the project without government support, as the project's return is too low commercially, though it is good for the economy and the environment," the source said.

Other investment models discussed were the government investing in the project through an infrastructure fund, and the government setting up a 75:25 joint venture with Thappline. However, those options would run into regulatory limitations.

The source also said this feasibility study would be revised and submitted to the Energy Business Department by the end of this month and then to the Energy Policy and Planning Office for approval.

This pipeline is expected to cost Bt15.23 billion, of which Bt8.85 billion is for the transmission system, Bt4.37 billion for the petroleum depot and distribution network and the rest for other infrastructure.Under this project, the Energy Business Department aims to cut fuel-transport costs. For example, it could help reduce fuel consumption by trucks by up to 40 million litres a year as well as their carbon emissions.


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