THAI PETROCHEMICAL BOOM ON TRACK

Thailand continues to mark progress on the ambitious expansion of its petrochemical industry.

Among recent developments:

The outlook for Thailand's troubled worldscale aromatics project has improved with a major cut in its estimated cost. In addition, the project apparently has drawn the interest of other companies seeking a possible equity stake.
Amoco Chemical Co., which lost a tender to build a worldscale purified terephthalic acid (PTA) complex in Thailand to Taiwan's Tuntex Co., is reviving its bid with a proposal similar to its earlier one. Amoco contends there will be enough demand to warrant a second PTA plant in Thailand.
Tuntex is negotiating with several business groups to take part in its $333 million, 350,000 ton/year PTA project in Thailand. Tuntex is soliciting interest from a number of Thai companies, including Bangkok Bank and the Saha Union industrial conglomerate to acquire portions of the 51% interest in the project earmarked for Thai shareholders. The firm also is negotiating with a number of Japanese companies with whom it has long trade ties, including Mitsui & Co. and Marubeni Corp., to acquire part of the 49% foreign shareholding in the project.
Thai Olefins Co. (TOC) marked further progress with feedstock contracts and financing arrangements for its proposed $720 million olefins plant, part of Thailand's second worldscale petrochemical complex (NPC II).
Indian industrial giant Birla proposed a $20 million ethylene glycol (EG) project in Thailand.

AROMATICS PROJECT COST CUT

Moving the site of the proposed aromatics project would slash its cost by $180-200 million from the original estimate of $700 million, according to a revised feasibility study by Foster Wheeler for project sponsor Aromatics (Thailand) Co. (TAC).

Project consultant Foster Wheeler said the savings could be achieved without scaling down the project size.

Original plans called for the aromatics complex to be built about 124 km southeast of Bangkok near Thai Oil Co.'s Sri Racha refinery, which will supply it with platformate feedstock.

Production is to include 312,000 tons/year of paraxylene, 232,000 tons/year of benzene, 52,000 tons/year of toluene, and 4,4,000 tons/year of xylene. Expected go on Stream by yearend 1993 or early 1994, the complex was to be one of two upstream links to NPC 11 (OGJ, June 3, 1991, p. 51).

TAC Managing Director Anuchint Supol said the project would be delayed by less than 3 months from the original timetable by moving it to Mab Ta Phud industrial park about 75 km farther southeast on the Gulf of Thailand coast. At Mab Ta Phud, the project would share tanks and other facilities with units under construction as part of NPC II.

In addition, the new site would give the aromatics complex easy access to feedstock from two big grassroots refineries proposed at Mab Ta Phud by Royal Dutch/Shell Group and Caltex Petroleum Corp. (OGJ, Jan. 27, p. 40), thus substantially reducing transportation costs of feedstock.

Foster Wheeler was to have submitted its final report earlier this year to state owned Petroleum Authority of Thailand (PTT). PTT has taken over the project from Exxon Chemical Eastern and Thai Oil, formerly its partners in TAC.

AROMATICS PROJECT HISTORY

Thailand's first aromatics project, reeling from dramatic escalation in cost estimates and bleak prospects for economic feasibility due to the global petrochemical slump, experienced a further setback when two of the three TAC shareholders decided to pull out last year.

Exxon, with a 35% interest, reportedly had demanded that the plant be redesigned to trim project cost and boost return on investment. That demand was rejected by Thai government officials on grounds it would considerably delay the project.

Partly state owned refiner Thai Oil, meanwhile, faces a cash flow crunch and has several big investment commitments in other downstream projects, such as construction of Thailand's first lubricant base oil plant. It held a 40% share in TAC.

PTT last year issued a letter of intent to a combine of Chiyoda Corp. and Technologie Progetti Lavori SpA in their $422.49 million bid to build the aromatics complex, but PTT allowed the tender to lapse past the contractors' bid deadline of Nov. 30, 1991, citing delays in the legal process involving PTT's takeover of TAC interests.

Meanwhile, Amoco Corp., Tuntex, and Siam Cement have offered to join PTT as equity participants in the aromatics project, PTT Gov. Luen Krisnakri said. Luen disclosed no details about their offers but noted there is a possibility of doubling the project's capacity to meet demand from Amoco and Tuntex to build PTA plants in Thailand.

In addition, Exxon said it is interested in resuming its participation in the project. Exxon Chemical Thailand Managing Director Arin Jira said his company would welcome offers from PTT to participate in the project.

PROJECT DETAILS

The aromatics complex's feedstock would be platformate from Thai Oil's refinery at Sri Racha, Chon Buri province, and pyrolysis gasoline from TOC's olefins plant to produce intermediate aromatic feedstocks for further processing.

These intermediate and downstream petrochemical producers under NPC 11 have committed to purchase feedstocks from its plant:

Siam Styrene Co. for 170,000 tons/year of benzene to produce styrene monomer.
Tuntex for 235,000 tons/year of paraxylene to produce polyester.
Thai Alkylate Co. for 15,000 tons/year of benzene to produce linear alkyl benzene.
Eternal Petrochemical Co. for 29,000 tons/year of orthoxylene to produce plasticizers.

In addition, TAC will sell 67,000 tons/year of toluene and mixed xylenes for direct processing into various industrial solvents and exporting 47,000 tons/year of benzene and 77,000 tons/year of paraxylene.

AMOCO PTA BID REVIVED

Amoco contends demand for PTA from Thailand's rapidly growing textile industry in 1995-2000 will outstrip the 350,006 ton/year capacity of the proposed Tuntex plant, scheduled to go on stream by 1994.

Moreover, prospects are good for exporting PTA from its proposed Thai project within the Asia-Pacific region, where the textile industry is also booming, an Amoco executive said.

The plan was unveiled only days after Tuntex placed a $16.66 million bank guarantee with the Thai Board of Investment (BOI) as a bond to implement its project.

Amoco is undertaking a new feasibility study of the project based on an earlier study. While the size of the project has yet to be determined by the study, there is a strong possibility Amoco might retain the earlier proposed capacity.

Under that proposal, capacity would be 250,000 tons/year at start-up, rising to 300,000 tons/year the second year and 350,000 tons/year the third year. Project site is likely to remain at Mab Ta Phud, where the Tuntex plant is to be located.

Project cost is expected to be comparable to that for the Tuntex project, about $300 million. Amoco plans to undertake the project with local partners, as it has with other PTA projects in Asia. Amoco must first convince BOI to lift its ban on new PTA projects-one of the stipulations in the tender Tuntex won-and win the kind of incentives extended to Tuntex, such as tax holidays deemed crucial to the project's viability.

OLEFINS PROJECT

TOC signed a 15 year contract to buy feedstock from PTT for its NPC II olefins plant.

The agreement calls for supply of 100,000-400,000 tons/year of liquefied petroleum gas, 3,000 b/d of natural gasoline-both processed from Gulf of Thailand natural gas-and 500,000 tons/year of full range naphtha.

Contract prices aren't disclosed, but PTT said they are competitive with world market prices.

Deliveries are to begin with start-up of TOC's plant, expected in fourth quarter 1994. It will produce 350,000 tons/),ear of ethylene, 190,000 tons/year of propylene, and 100,000 tons/year of mixed C4S- TOC earlier let a $495 million contract to a combine of Stone & Webster International, Daelim Engineering Co., and Sumitomo Corp. of Japan to build the plant.

Meanwhile, a nine bank group led by Industrial Bank of Japan confirmed plans to provide a $480 million syndicated loan and credit guarantee facility for the TOC olefins plant. About $330 million of the loans will be in the form of export credits and $150 million as commercial loans. TOC intends to raise the remaining $240 million in financing from equity contributed by shareholders, including PTT 40%.

ETHYLENE GLYCOL PROJECT

Birla's proposal to construct a 50,000-60,000 ton/year EG plant in Thailand ran into an early problem: supply of ethylene feedstock.

TOC said it can't confirm whether it could accommodate Birla's feedstock needs, pending completion of ethylene supply agreements with the five downstream users that have signed up. But the company said it is unlikely the plant could provide Birla feedstock if the five took up all contract volumes. TOC said Birla could resolve the problem by investing in an expansion of the olefins plant.

Birla is seeking tariff and nontariff incentives from BOI to improve project viability, and BOI says it may not grant the incentives if concerns over ethylene feedstock supplies aren't resolved.