PTTGC’s partner Daelim in US project leaves

Company determined to forge ahead

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We have enough time to search for a new partner before making the final decision. KONGKRAPAN INTARAJANG

Chief executive, PTTGC

PTT Global Chemical Plc (PTTGC), Thailand’s largest petrochemical producer by capacity, is determined to continue its petrochemical complex project in the US even as its partner, South Korean construction and chemical company Daelim Industrial, has withdrawn from their joint venture.

The planned development of an ethylene production facility with a capacity of 1.5 million tonnes in Belmont County, Ohio will not stop, though it means PTTGC needs to conduct its feasibility study alone, said chief executive

Kongkrapan Intarajang.

PTTGC plans to make the investment through its subsidiary, PTTGC America.

A final investment decision on the project was earlier scheduled for later this year, but after the spread of Covid19, it will be delayed until the second half of 2021.

“We have enough time to search for a new strategic partner before making the final decision,” said Mr Kongkrapan.

He said the company has several firms on the list for a new joint venture. They previously showed interest in the project, but PTTGC decided to choose Daelim.

“We have plenty of experience in the petrochemical business over the past 25 years,” Mr Kongkrapan said.

“This latest episode should have a low impact.”

He said the company wants to develop a petrochemical cracker in the US as part of its plan to increase its overseas investment to more than 50% of total capital expenditure, up from 30%.

This will enable PTTGC to reduce dependence on domestic oil supply and make new investments, estimated to range between 150 and 200 billion baht, in lucrative foreign markets.

The company has long focused on the domestic market, but over the past six years it expanded its business to the US and European Union.

The US and other potential overseas petrochemical markets will become a second home for PTTGC, Mr Kongkrapan said.

The company wants to increase the share of overseas revenue from 50% to 60% after 2030.

PTTGC America has already selected an area for the construction of a large petrochemical complex it hopes will serve as a dynamic economic anchor for this region.

Since September 2015, the subsidiary has been investing in front-end engineering design work to determine the feasibility of the complex.

Mr Kongkrapan said PTTGC America is looking for an appropriate low-interest loan to finance the project as interest rates remain low.