SCN to add 9 CNG stations

SET-listed Scan Inter Plc (SCN), a natural gas trader and operator of compressed natural gas stations, plans to increase its network to 16 CNG stations from seven now.

The expansion will require an investment of 1.4 billion baht to acquire existing stations and develop greenfield stations. The company’s executive board recently approved the budget.

President Ritthi Kitphiphit said SCN’s seven gas stations generate sales of 210 tonnes a day. When all 16 stations are in operation by 2019, sales volume is expected to triple to 670 tonnes daily.

“Demand for natural gas has rebounded to grow by 3-4% after contracting 8-9% during 2014-16 because motorists are again modifying their vehicles to be CNGcompatible,” Mr Ritthi said.

In the past two years, global oil prices were below US$50 a barrel because of a glut. The Thai government then floated the retail CNG price after it was capped at 10.5 baht a litre for almost a decade, also floating cooking gas, which resulted in a narrow price gap between natural gas and petrol.

“Although we had cash from an initial public offering of 1.2 billion baht during the past two years, investment in new CNG stations was not viable until global oil prices rebounded,” he said.

The gap between retail prices for CNG and petrol averages 22 baht per litre now, while the gap between CNG and diesel is 13.6 baht.

After adjustment of the energy price structure, the gross margin of CNG retailers rose to 3.43 baht per kilogramme, up 71% from capped prices.

SCN announced yesterday total sales this year would grow 40% from last year’s 2.5 billion baht. It reported 2016 sales growth of 20% to 2.5 billion baht.

SCN shares closed yesterday on the Stock Exchange of Thailand at 8.45 baht, up 45 satang, in trade worth 228 million.