PTT gets operating permit for gas separation, downstream units

07 October 2010 06:07  [Source: ICIS news]

By Nurluqman Suratman

SINGAPORE (ICIS)--Thailand’s Industry Ministry has handed oil and gas major PTT the operating licenses needed to run most of its stalled projects in Mab Ta Phut, including the firm’s 6th gas separation (GSP) unit, a company source and analysts said on Thursday.

“We have been given the operating permit for the gas separation plant on 24 September,” a company source told ICIS.

PTT was looking to start full production at the GSP unit by the end of the year, the source added.

Affiliate PTT Chemical have also been handed permits to start running its 300,000 tonne/year high density polyethylene (HDPE) expansion project and its 300,000 tonne/year low density polyethylene (LDPE) projects, said Sutthichai Kumworachai of brokerage house KGI Securities in Bangkok.

“The government gave a go for HDPE expansion on the last week of September,” Kumworachai said.

However, the firm’s 95,000 tonne/year monoethylene glycol (MEG) expansion project in Mab Ta Phut would remain suspension under the 2 September ruling which freed 74 out of 76 projects that were suspended on environmental grounds by the Thai Central Administrative Court.

It would take a month or longer for PTT to complete trial runs and tests at the GSP unit after receiving an operating permit, analysts had previously said.

The company’s 6th GSP plant would feed ethane gas feedstock to PTT’s 1m tonne/year cracker, which was currently running at 75% capacity.

The cracker would then feed ethylene feedstock to an integrated production complex that produces 300,000 tonnes/year of LDPE and 400,000 tonnes/year of linear low density polyethylene (LLDPE), according to the company source.

PTT’s 6th GSP would also provide propane gas feedstock to a 400,000 tonnes/year polypropylene (PP) plant belonging to affiliate HMC Polymer via the cracker, the source added.

Downstream units belonging to PTT Chemical would begin full production soon after the GSP comes on stream, analysts said.

The other projects were probably given the operating permits around the same time as the 6th GSP plant, according to Naphat Chantaraserekul, an analyst at brokerage firm DBS Securities.

PTT could not immediately confirm when the permits for the PTT Chemical projects were given out by the country’s industry ministry.

“While the news about PTT Chemical being given the permits to run was made public, they have been quiet about the permit for PTT’s gas separation unit as it would spark more protests from NGOs (Non-Governmental Organisations),” Chantaraserekul said.

Environmental activists filed a lawsuit against PTT and other companies with projects in Mab Ta Phut earlier this week in a move to urge the government to review its list of 11 types of harmful industrial activities, which paved the way for the initial court suspensions in Mab Ta Phut to be removed, he said.

“This [the lawsuit] will not have any major impact on the GSP as it does not qualify as a harmful activity under the list. Whether the Central court agrees to take up the case or not will not matter to PTT,” Chantaraserekul said.

“However, any decision to follow up on the case will impact other companies,” he added.

Meanwhile, PTT Chemical is currently conducting health and environmental assessments on its suspended MEG expansion project and was scheduled to conduct a public hearing by the end of the year, Chantaraserekul said.

“The assessments and the public hearing is a requirement by law and they need to complete them before the court could approve them to operate,” he said.

To discuss issues facing the chemical industry go to ICIS connect
Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections

By: Nurluqman Suratman

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