Banpu allots $210m for capex
Banpu Plc, the SET-listed coal miner and energy firm, has announced capital expenditure (capex) this year of US$210 million for business expansion ranging from upstream to downstream.
Chief executive Somruedee Chaimongkol said $117 million would be allocated for continuing pipeline projects of both Banpu and its power-generating subsidiary, Banpu Power Plc (BPP).
Another $30 million is for coal trading expansion across Asia-Pacific, while the remaining $63 million is for the acquisition of the Northeast Pennsylvania (NEPA) field in the US.
For the coal business, Ms Somruedee said global coal prices have rebounded after hitting bottom as demand and supply sides should be about to reach equilibrium.
She projected the company’s coal production this year at 45 million tonnes, up from 44.5 million tonnes the previous year.
Major coal mines providing supply are in Australia, China, Indonesia and Mongolia.
The average global coal price is expected to be slightly below $50 per tonne, likely to be achieved within the first quarter this year, said Ms Somruedee.
She said Banpu started diversifying into oil and gas sectors last year by acquiring shares in two shale gas resources in the US. The company has total gas production of 39 million standard cubic feet per day (MMSCFD).
In March last year, it acquired a 29% share in Chafee Corners in the US worth $112 million, which generates gas production of 21MMSCFD. Banpu recently spent $63 million to acquire a 10.2% share in NEPA, which produces 18MMSCFD.
The company plans for BPP to raise its committed generating capacity to 2,050 megawatts, up from 1,930MW last year.
Voravudhi Linananda, BPP chief executive, said the additional capacity will come from China and Japan. It aims to increase its capacity to 2,580MW by 2020 through its connection with local partners in Indonesia, China, Laos, Vietnam and Japan.
Mr Voravudhi said the power business in Thailand is about to become saturated as more investors join the market.
He said the company is waiting for the right time to raise cash, which could be a loan or a debenture, for business expansion, as shareholders approved a plan to raise up to 40 billion baht.
BANPU shares closed yesterday on the Stock Exchange of Thailand at 19.60 baht, up 10 satang, in trade worth 775 million baht.