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Thai PTT Global looks to import more feedstock after oil prices drop

[BANGKOK] Thailand's PTT Global Chemical PCL said on Thursday it was studying several options for supplying sufficient raw material to its petrochemical plants, including imports of oil feedstocks after declines in global crude prices.

The move is part of a plan to cope with a potential drop in domestic natural gas supply after Thailand's government put bidding for new oil and gas concessions on hold, chief executive Supattanapong Punmeechaow told reporters.

"Natural gas in the Gulf of Thailand is likely to be depleted over the next seven to eight years. We have to consider several options including using raw material from our refinery, importing more feedstock and shale gas," Mr Supattanapong said.

PTT Global, petrochemical flagship of Thailand's top energy firm PTT PCL, will use more naphtha from its oil refinery to feed its olefins crackers which make products such as ethylene and propylene, he said.

PTT Global produces petrochemicals primarily from natural gas, and in the past it has enjoyed good margins by using domestic gas supplied by PTT from the Gulf of Thailand.

But when global oil prices drop and drag down refined product and petrochemical prices, PTT Global's profitability is squeezed because its natural gas costs fall more slowly than the sales value of its petrochemical products, analysts said.

PTT Global, one of the world's top 10 ethylene makers, has petrochemical capacity of 8.75 million tonnes a year and runs a refinery with a crude and condensate refining capacity of 280,000 barrels per day.

It is planning to spend US$4.5 billion during 2015-2019 on expansion at home and abroad. It is also studying a plan to invest in a one-million tonne olefin project in the United States using ethane from shale gas as feedstock.