Chansin hopes to maximise value at state oil and gas firm
New chief executive unveils business plans
Chansin Treenuchagron, the newly appointed president and chief executive of PTT Plc, believes his direction will add value to existing assets of the national oil and gas conglomerate.
Mr Chansin talked to Thai media for the first time since PTT’s board announced his appointment on March 16. He will succeed Tevin Vongvanich, who will retire on Aug 30. His term will last only 20 months, as he will turn 60 in May 2020.
He told PTT’s annual general meeting with shareholders that the group is planning to add value to its coal mining business, including cleaner coal-fired power plants.
Mr Chansin made the decision based on the fact that global coal prices have normalised after a slump in recent years.
In August 2012, PTT acquired Singapore-listed Sakari Resources Co (SAR), a coal mine operator in Indonesia, at a cost of US$959 million (30 billion baht) for a 55% stake through PTT Asia Pacific Mining. PTT has gradually increased its position to 94.6%.
SAR has coal mine operations in Indonesia’s Sebuku and Jembayan with a combined output of 10 million tonnes a year. It also has licences to explore coal resources in Brunei and Madagascar.
“Although the coal business gained limited profits over the last five years, PTT expects high profit to resume after the company’s implementation of a lean cost programme since 2016,” Mr Chansin said.
But PTT still has to resolve a dispute between Indonesia’s environmental policymakers and subsidiary PTT Exploration and Production Plc (PTTEP) regarding allegations of an oil spill in the Timor Sea by the Montara oil block.
The dispute has forced PTT to halt new investment in Indonesia since 2016.
Mr Chansin said PTT may not focus on coal capacity expansion, as adding value to existing assets is the top priority.
He said PTT will focus on fast-growing businesses in line with the government’s S-curve policy, including electric vehicles, electricity, petrochemicals and biochemicals.
Wirat Uanarumit, PTT’s chief operating officer of upstream and gas business, said the segment has teamed up with PTT Global Chemical Plc to conduct a feasibility study to spin off methane and gas as feedstock for petrochemical production as domestic gas resources deplete and liquefied natural gas (LNG) imports increase.
A study called “Ethane Extraction” is aimed at adding value to the petrochemical business.
Mr Wirat said ethane gas extraction has a tentative cost of $300 million. PTT would extract ethane from LNG at an annual capacity of 500,000 tonnes.
PTT has been awarded a project management consultancy contract by Japan’s Tokyo Gas Energy Solutions for the second unit of the LNG receiving terminal in Rayong’s Nong Fab.
PTT LNG Co, a wholly owned firm, is planning to build a 7.5-milliontonne facility for LNG with two storage tanks of 250,000 cubic metres each at Nong Fab, according to the LNG World News Report.
The facility will be part of PTT’s plan to raise annual production capacity to 19 million tonnes by 2023 from 10 million tonnes, Tokyo Gas said in a release.
The Nong Fab receiving terminal, worth about $1 billion, will be located near PTT’s existing LNG import plant in Map Ta Phut.
PTT expects to start operations of the facility in 2021.