GLOBAL POWER Synergy Corporation (GPSC)’s share price rose 1.30 per cent to close at Bt58.25 yesterday after it said it would purchase a 250-megawatt energy recovery unit from Thai Oil Plc (TOP) for no more than Bt24.11 billion.
Chawalit Tippawanich, president and chief executive for PTT’s power arm, GPSC, said that its board on Monday agreed that either the company or a yet-to-be-established subsidiary, would purchase the energy recovery unit in a deal worth no more than Bt24.11 or about $757 million.
The unit is part of TOP’s capacity expansion project, Clean Fuel Project (CFP).
The unit is expected to be completed and receive a provisional acceptance certificate to start commercial operation in the third quarter of 2023.
“The deal follows the company’s business strategy focusing on expansion of investment” to grow with its parent company, PTT. It would give an opportunity to GPSC to extend its power and utilities business and invest for future power security, Chawalit said.
Contract signing by GPSC or its subsidiary is expected after approval from a shareholders’ meeting scheduled within this April. The company will use its cash and/or other sources of funds, such as borrowings from financial institutions, to finance the deal.
The energy recovery unit will use oil sludge from the CFP to produce power and steam for the project. The unit has power production capacity of 250 megawatts and steam production capacity of 175 tonnes per hour.
The CFP is a part of TOP’s five-year $4.825 billion (Bt153.5 billion) investment plan (2019-2023) to improve the refinery, upgrade fuel oil to jet oil and diesel, and increase the refining capacity to 400,000 barrels per day. TOP’s current refining capacity is 270,000 barrels per day.
TOP is expected to finance $1.37 billion for the CFP in the first quarter of this year.
Presently, the company’s fuel oil accounts for 7 per cent of the total. In the future, jet oil and diesel will rise to 70 per cent from the current 60 per cent, while gasoline will decline from the current 15 per cent following future higher demand for electric vehicles.
GPSC currently has a combined power production capacity of 1,530 megawatts and steam production capacity of 1,512 tonnes per hour. This year, its power production capacity will rise to 1,940 megawatts after the Nam Lik power plant and Xayaburi power plant in Laos, and the Central Utility Plant 4 in Rayong province commence their operations.
GPSC also gained a conditional approval from Thailand’s Energy Regulatory Commission for its merger plan with Glow Energy Plc, which is majority-owned by France’s Engie. The approval comes with the condition that Glow will have to sell its Glow SPP 1 Co Ltd. before the merger.