S&P Global Ratings said in a press release on Friday that plans by Thai Oil to finance most of its Energy Recovery Unit (ERU) won't materially change the project's impact on the company's leverage through 2022.
ERU is a utility unit supporting Thai Oil's Clean Fuel Project (CFP).
S&P said that on January 22, Thai Oil announced an asset sale and purchase agreement with sister company Global Synergy Power Public. According to the agreement, GSPC will acquire ERU, a 250 megawatt power plant with 175 tons per hour of steam capacity, and supply electricity to CFP under a 25-year power purchase agreement.
"We expect Thai Oil's leverage in 2023 to remain largely in line with our previous assumption. That's because the cost of CFP, excluding ERU, remains the same at US$4.2 billion (Bt133 billion). However, leverage will be higher through the project because the company will need to fund an additional US$550 million (i.e., 80 per cent of US$688 million investment cost)," the company said.