Thai IRPC plans $ 1.4 bn refinery upgrade
IRPC, formerly known as Thai Petrochemical Industry (TPI), plans to invest $ 1.4 bn from this year until 2011 to
upgrade its refinery, increase petrochemical capacity, and enlarge its deep-sea port.
President and chief executive Piti Yimpasert said the investments would be spent on four projects starting with a refinery improvement program to increase production of high-margin refined oils such as gasoline and diesel. After completion, IRPC's maximum refining capacity would be increased to 258,000 bpd from the current 215,000 barrels. The refinery is now running at about 180,000 to 190,000 bpd, Mr Piti said.
Some 10 % of its capacity goes to gasoline and diesel and 43 % and 20 % of the output are for low-margin,
high-sulphur diesel together with long-residue oil, and naphtha, respectively. The remaining capacity is for
lubricants and asphalt.
Piti said the current budget would be spent producing low-sulphur diesel that meets Euro 4 emission standards. As well, IRPC would increase its propylene capacity from the current 312,000 tpy to 412,000 tons by 2011. The fourth project is to enlarge its deep seaport to accommodate vast carriers, Piti said, adding that the project would be completed by end of 2011.
In addition, IRPC is joining with other local refineries including Thai Oil and PTT group to invest $ 1 bn in a
residue conversion unit. The project is expected to have an annual capacity of 70,000 to 120,000 tons, Piti
The residue conversion unit would upgrade refineries by converting their long-residue output to higher-margin oils. IRPC produces 50,000 tpy of long-residue petrol, or 33 % of its total output compared to the industry average of 6-7 %, he added.
Given IRPC's expected lower gross refining margin (GRM) this year compared to the past recent years, Piti said the
company hoped to cut costs this year. The measures, which cover crude procurement, operation and maintenance costs
and marketing expenses, are aimed at cutting overall expenses by 10 % or 1.7 bn baht per year.
IRPC, 33 % owned by the energy giant PTT, reported 2007 profits of 12.98 bn baht on revenues of 232.3 bn, sharply up from profits of 6.8 bn on revenues of 209.45 bn the year before.