Bangchak Petroleum will enhance the safety standard of its refinery to be more environmentally friendly and in the long run will tone down the refinery business, according to its board chairman Krairit Nilkuha.
Krairit, who also serves as director-general of the Alternative Energy Development and Efficiency Department, said that the management discussed the future of the Bangkok refinery and agreed that within 10 years the company would tone down the refinery role, given running such a business in the city may not fit well environmentally.
Currently the refinery business is it's main income source but this would change in the future. It has decided not to expand the refinery operation but would just focus on enhancing its safety level so it fits better with the surrounding location.
Earlier the company announced a long-term investment plan worth Bt87.5 billion from 2012 till 2019. In the first phase from this year to 2014, it will invest Bt26 billion, of which Bt15 billion will be put into building solar power plants and another Bt4 billion in an Efficiency, Energy and Environment Improvement (3E) Project. It will also spend Bt6 billion on bio-fuel project development and Bt1 billion on palm and cassava planting.
Bangchak aims to reduce Earnings Before Interest, Taxes, Depreciation and Amortisation (EBITDA) from the refinery to 50 per cent in 2015 before cutting that to 35 per cent in 2020, down from the forecast 70 per cent this year. The return from its solar power business should reach 20 per cent next year.
The company's crude distillation unit 3 in its refinery complex in densely populated Phra Khanong district caught fire early last Wednesday, the second such incident in two years. The company plans to rebuild the unit and a complete rebuild is expected within three months.
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(Originally published July 8, 2012, in The Nation.)