PTT plans to borrow 60% of capital for oil refinery project

dtinews/ SGT

Thailand’s PTT Public Company Limited says it is financially capable to pursue the giant oil refinery and petrochemical project in Binh Dinh Province, and will cover at least one-third of the total cost of the project, said a local official.

 

PTT will cover at least one-third of the total cost of the project. Photo WSJ

The remaining two-thirds will be mobilized from strategic partners and foreign and local investors. The project costs a hefty US$27 billion, said Man Ngoc Ly, head of the authority of Nhon Hoi Economic Zone where the big-ticket project is to be located.

This means PTT will borrow 60% of capital for the project, 40% would come from investor’s equity and the rest would be loans.

In response to the question whether PTT will be able to carry out such a huge project, Ly said PTT is fully financially capable because it is a large Thai state-owned oil and gas company with total assets of over US$50 billion.

Talking to the media, Deputy Minister of Industry and Trade Ho Thi Kim Thoa said: “We currently have only one operational oil refinery, so it is necessary to call for investment into this area.”

On the contrary, Vietnam Oil and Gas Group (PVN) asked the trade ministry not to agree with this project, explaining that it would lead to an oversupply. Furthermore, Nhon Hoi lies near Vung Ro, Van Phong and Dung Quat, where oil refinery projects have been planned.

The Binh Dinh authorities believe this oil refinery and petrochemical project will be one of the key projects serving as a driving force for economic development in the province and better investment attraction into Nhon Hoi Economic Zone.

The project initiated by PTT if approved will be developed on 2,000 hectares in Nhon Hoi Economic Zone with an estimated capacity of 660,000 barrels of crude oil per day, or some 30 million tons per year. It would get off the ground in the first quarter of 2016 and start operations in 2019.

When approved, it would be the biggest oil refinery project in Vietnam.

 

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