PTT Group, Thailand’s biggest energy firm, is reviewing investment plans worth billions of dollars for two refinery and petrochemical units due to concerns about the impact of Europe’s debt crisis on the global economy, the chair of the units said.
PTT Global Chemical Pcl has previously said it plans to invest $4.5 billion over five years to expand its petrochemical business, while IRPC Pcl has said it plans to invest some $600 million this year in value-added petrochemical projects and plant maintenance.
“Any new projects that are not necessary will be put on hold for both companies. They also have to consider their liquidity, stock and cash flow,” said Prasert Bunsumpun who is also the former chief executive of the entire PTT group.
But Prasert declined to comment on whether the review was part of overall review by state-controlled PTT. The group announced in February investment plans worth 720 billion baht ($23 billion) over five years as part of an aggressive expansion overseas to boost energy reserves and earnings.
Much of that investment is focused on expanding its gas business and on the development of oil and natural gas fields for its upstream PTTEP unit, as well as foreign investments.
PTT has more than 30 units but PTT Global Chemical and IRPC are two of its biggest.
Prasert told reporters the crisis in Europe had contributed to a drop in global oil prices, which could result in inventory losses, adding the two companies were scaling back their inventories.
PTT Global Chemical, which is 49 percent owned by PTT, has olefins and aromatic petrochemical capacity of 8.2 million tonnes a year and refining capacity of 280,000 barrels per day.
IRPC, 38.5 percent owned by PTT, runs a 215,000 barrel-per-day refinery and petrochemical complex with annual capacity of 924,000 tonnes of plastic pellets.
In afternooon trade, PTT shares were up 0.3 percent, in line with a 0.5 percent gain in the broader market. Shares in PTT Global and IRPC were unchanged. -By Pisit Changplayngam