16-07-04 The Thai Ministry of Energy said it will not allow local oil refinery plants to produce bunker oil containing 0.5 % sulphur since it is unlikely to be cost-effective.
Vice-Minister for Energy Viset Choopiban said the Ministry of Energy has also taken into account the Electricity Generating Authority of Thailand’s (EGAT) proposal for solving problems related to the usage of bunker oil from this year to 2006. EGAT needs to use more bunker oil as fuel for power production at its plants as PTT’s parallel gas pipelines in the Gulf of Thailand are running at their full capacity. Once a third pipeline in the Gulf of Thailand is ready for service in 2006, then PTT would be able to supply more gas, said Viset.

The problem is that EGAT’s Bangpakong power plant in Chacherngsao province needs bunker oil containing 0.5 % or less of sulphur as fuel for its power plant, said Viset. Currently, Thailand is unable to produce this kind of bunker oil as it has to import the oil from foreign countries, said Viset.
As of now, local oil refiners could only produce bunker oil contaminated with 2 % of sulphur, which is even being exported to foreign markets, he said. EGAT’s power plants, other than the Bangpakong plant, could use bunker oil containing 2 % sulphur without any problem, said Viset.

But the Bangpakong power plant is aging and has no sulphur detecting equipment which is why it uses bunker oil with sulphur content of 0.5 % or less for fear that it could cause environmental pollution, said Viset. From this year to 2006, the Bangpakong power plant has to import more bunker oil with 0.5 sulphur content from the foreign market, said Viset.
The Ministry of Energy has no plans to boost the country’s energy imports. It would rather look for ways of cutting the import bill, said Viset. The Ministry of Energy does not want local refinery plants to make more investment by installing machinery that could produce bunker oil with sulphur content of 0.5 %, said Viset.

Viset said the cost of equipment thatcould produce bunker oil with 0.5 % sulphur is high and it is unlikely to be cost effective for the plants, given that such bunker oil with low sulphur would be supplied only to the Bangpakong plant.
Viset said the Ministry of Energy would try to solve the problem by allowing EGAT to import bunker oil with 0.5 % sulphur mix from the foreign market at the current level. But it would also encourage the use of locally-produced bunker oil containing 2 % sulphur mixed with 0.5 % bunker oil so that the sulphur content is brought down to 1 % for use in the Bangpakong power plant, said Viset.

This way, concerns over pollution from the Bangpakong plant could be minimised at a time when PTT could not get more gas supply from its third gas pipeline in addition to exporting the surplus of bunker oil that is produced by Bangchak Petroleum’s refinery plant, said Viset.
More use of bunker oil would help power plants lower their production costs as the current bunker oil price has risen in tandem with the oil price, said Viset. The price of bunker oil with low sulphur content of 0.5 % is more expensive than bunker oil with 2 % sulphur content, said Viset.