Thai companies to refine crude oil for Indonesia

Thai Oil Plc and Thai Petrochemical Industry Plc will probably win assignments to refine crude oil for Indonesia following the signing of an agreement in principle reached by the Thai and Indonesian governments. Prime Minister Thaksin Shinawatra said Indonesia produced 1.4 million to 1.5 million barrels of crude per day, but its refining capacity was less than one million barrels. “Thailand, which has excess capacity, can probably take approximately 200,000 barrels a day for refining for Indonesia,” Mr Thaksin said after a meeting visiting Indonesian President Wahid. Indonesia’s state-run oil company Pertamina had earlier approached the Petroleum Authority of Thailand (PTT) to provide it with refined products. Industry Minister Suriya Juengrungruangkij said Indonesia had a refining capacity shortage of up to 700,000 barrels per day while Thailand’s six refineries had 340,000 barrels of excess capacity. Thailand and Indonesia also agreed to revive a gas-purchasing agreement that had been cancelled in July 1997 due to the economic crisis. Under the agreement, the PTT will buy natural gas from the Natuna field off Indonesia. Both agencies will invest in a 1600-km pipeline from the field to the Ratchaburi power plant in Thailand. Mr Suriya said Natuna had the largest gas reserves in Asia, with up to 46 trillion cubic feet.

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