PTT to ramp up coal production

PTT Plc expects its Indonesian coal output to rise fourfold to 40 million tonnes in the next 10 years to serve the rapid rise in demand, says Tevin Vongvanich, senior executive vice-president of the country’s biggest energy company.
Mr Tevin, who oversees strategy and development, said the company saw coal as the main source of fuel in the near future instead of natural gas and oil.
“Global energy consumers are depending too much on gas and oil, and their reserves should not last longer than 50 years, while coal reserves can last for the next 140 years,” he said.
PTT International, a holding arm of PTT, acquired a 60% interest in Straits Bulk & Industrial Pty Ltd (SBI) in March from Australian market-listed Straits Resources Limited (SRL), with total cash consideration of up to US$335 million. Its Indonesian mine produces 9 million tonnes of coal a year.
PTT expects to earmark a larger budget to develop technology that can transform solid coal to fuel oil or gas, increasing its options when global oil prices are volatile.
The company also wants to develop a mine-mouth coal-fired power plant in Indonesia and other Asian countries.
PTT plans to forge ahead with coal-fired power plants despite strong opposition in Thailand because natural gas reserves locally should be exhausted in 30 years, and oil may no longer be a main fuel for the power sector, he said.
Meanwhile, through PTT International, the group plans to enter the oil market in Asian countries, and it is interested in running service stations in neighbouring countries to drain the domestic refined-oil capacity glut.
Refined oil exports look bleak as national oil companies in large economies are looking to acquire refineries in other countries to secure supply.
Thailand’s refining capacity stands at 1.2 million barrels a day, around 30% above current demand of 840,000 barrels.
However, the ambitious investment plans of PTT’s exploration arm, PTT EXploration and Production, have prompted Moody’s Investors Service to reduce to negative from stable the company’s A2 local currency issuer rating. Moody’s affirmed its A3 foreign currency issuer rating with a negative outlook.
PTTEP has planned exploration and production expenditures of 330-340 billion baht over 2009-13, averaging 66-68 billion annually, and representing a substantial rise from the yearly average of 41 billion over the last three years, Moody’s said.

PTTEP shares closed yesterday on the SET at 139 baht, up one baht, in trade worth 2.49 billion baht. PTT rose three baht to 229, in trade worth 1.6 billion.

(Source: The Nation)