ENERGY / BCP delays ethanol plan as demand slows
Written by Gunboy on Wednesday, December 3rd, 2008
ENERGY / BCP delays ethanol plan as demand slows
YUTHANA PRAIWAN AND SOMRUEDI BANCHONGDUANG
Bangchak Petroleum Plc (BCP), the majority state-owned oil refiner and distributor, will delay its ethanol manufacturing project due to the uncertainty of domestic and regional demand, said president Anusorn Sangnimnuan.
“The ethanol price is now higher than that of petrol as crude prices keep going down. We haven’t seen the bottom yet. We have plenty of time to work on the project, so we can wait until ethanol demand is greater,” he said.
Bangchak announced two months ago a plan to build a 35-billion-baht ethanol factory in Ayutthaya province, with a daily capacity of 200,000 litres. It was to hold a 40% share in the venture with the remainder held by its strategic partners, with construction starting next year and taking 18 months.
Even though the ethanol project is on hold, its one-billion-baht biodiesel production plant in Ayutthaya will start operation in the middle of next year with daily output of 400,000 litres.
Dr Anusorn said biodiesel, a mixture of biofuel and high-speed diesel, should find strong demand given that government support is likely to continue.
“We expect to see demand increase strongly this year in line with an increase of petrol stations that offer biodiesel, while the government is still trying to boost consumption through attractive incentives to operators and motorists,” he said.
Bangchak itself is looking to double its biodiesel dispensers to 1,000 stations by the end of this year from 500 now.
To improve its competitiveness in the oil business, Bangchak signed a contract yesterday with TMB Bank for a total financial solutions package worth 1.5 billion baht. The package covers working capital loans of 1.4 billion baht, buyer financing to BCP gas stations of 100 million baht, and cash management service in BCP’s throughput volume of 90 billion baht.
Interest rate charges for the working capital loans are calculated at market rates. The 100 million baht loans to BCP service stations are quoted at the minimum overdraft rate. Loans of up to two million baht each will be given to petrol station owners who BCP fuel and are certified by the company.
BCP shares closed yesterday at 6.20 baht, down 10 satang, in trade worth 168,000 baht.
Bangkok Post
Wednesday December 03, 2008
