Thai refineries at maximum capacity to meet demand after maintenance
BANGKOK (Reuters)—Despite weak margins, the top three refineries in Thailand will run at full volumes during 3Q to compensate for a fall in output from a petrochemical plant that has been shut down for maintenance.
International crude prices hit a seven-month high near $51/bbl this week, but global oversupply has kept them well below the average for the past five years of $91 a barrel.
This year's price gain and a regional fuel supply glut have pulled profit margins for complex Asian refineries down to around $4.76/bbl, less than half of the nearly $10/bbl average seen in January. That has led some Asian plants to consider cutting runs.
However, Thai Oil's 275-Mbpd, the flagship of state-owned energy firm PTT's refinery business, will run at full capacity through 3Q, Thai Oil CEO Atikom Terbsiri said. "We will continue to run fully to meet domestic demand," he said, adding that stronger margins for some petrochemical products would help compensate for lower profits for making gasoline and diesel.
The plant accounts for about one-fifth of Thai refining capacity, and ran beyond nameplate capacity in 1Q at around 107%, Mr. Atikom said.
Thailand saw fuel demand growing at an annual rate of over four% in early 2016, its fastest pace of growth in 2.5 yr, according to the International Energy Agency. Rapid growth in tourism has taken the country's jet fuel demand to record levels.
Overall supply produced from Thailand's refineries has fallen, however, since PTT Global Chemical Pcl. (PTTGC) began a scheduled 63-day full maintenance shutdown at its 280-Mbpd refinery in May.
PTTGC also plans to shut down an olefins cracker for 16 days in September and another petrochemical plant in the same month.
State-controlled PTT is Thailand's largest energy group with stakes in three of the country's six refineries. Aside from Thai Oil and PTTGC, PTT also has a stake in IRPC Pcl.
Petrochemical-based refiner IRPC will also run fully in the third quarter, and postpone a major maintenanceshutdown of its 215-Mbpd refinery to 1Q 2017, pushing it back from 4Q. The postponement was because IRPC wanted to reap the benefits of an upgrade that was just completed in May.
The upgrade project should help boost its refinery's run rate to 190 Mbpd to 200 Mbpd for 2016 from 187 Mbpd in 1Q, IRPC has said.
Reporting by Khettiya Jittapong; editing by Simon Webb and Tom Hogue
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