Thailand’s biggest energy company, PTT Public Co. Ltd., has chosen the Philippines as a key growth area for its aggressive retail expansion in the Asean region, setting aside 1.3 billion baht (P1.82 billion) for research alone to find other viable varieties of gasoline and lubricants to develop.
Its subsidiary, PTT Philippines Corp., currently operates 96 stations across the country.
“Our direction is to have 500 stations by 2020 in Asean countries. We are planning to have 300 stations in the Philippines by 2020; now we have 96 [in the Philippines], so we still have to put up 200 stations,” PTT Public Co. Ltd. vice president for international marketing Wisarn Chawalitanon told The Manila Times in an interview.
He said the company also remains very keen on setting up a local liquefied natural gas (LNG) plant that could require an investment of about $2 billion for the entire integrated project.
Other than the Philippines, PTT has local subsidiaries in Laos, Cambodia, and Myanmar.
“The Philippines takes a very big role in PTT’s expansion in Asean. Our target is Luzon for the next five years, but we will look into the south also, especially in Mindanao. We plan to have at least 20 stations in Mindanao, we are now talking with some businessmen for some joint ventures,” he added.
For this year PTT Philippines is planning to open 15 stations on the top of existing 96 service stations.
Pending the official figure for its total amount of investment planned for the Philippines, the official said the company will spend P600 million on building at least three premium stations in the country, costing about P200 million each.
The highlight of PTT’s expansion in the country in 2016 is the opening of its biggest station, the two-hectare premium PTT SCTEX in Concepcion, Tarlac. The facility, which cost more than P200 million, is expected to open this month.
The service station investment varies depending on the size; the average station cost is about P15 million for a compact 600 to 700 square meters, while the micro station costs P4 million to P5 million, and the premium station costs more than P200 million.
“We already have compact size stations, what we are doing now is to standardize. Right now the problem is different countries are doing their own size, but we are trying to standardize,” Chawalitanon said.
“What we intend to present is the one that is premium size, the lifestyle size, the one equipped with commercial features such as Cafe Amazon and 7/11 like in SCTEX,” he said.
“We would like to invest with the premium size, two to three stations [per year]for the next five years,” he added.
Meanwhile, PTT still remains bullish on investing in a liquefied natural gas (LNG)-powered facility in the Philippines, which could mark the Thai fuel retailer’s venture into the power generation business in the country.
PTT is the largest energy company in Thailand, where it distributes natural gas as well as conventional fuel.
“We really want to invest in LNG, we said before that our Global Power Synergy, the power company of PTT and power generation company in the Philippines would talk with Filinvest [Development Corp.],” Chawalitanon said.
“The LNG business, we look at that as clean energy, the problem is the investment is quite big. It’s hard to invest in the Philippines because you still have a lot of coal-power generation, which costs much less than LNG,” he said.
Chawalitanon, who was PTT Philippines President and has stayed in the country for seven years, said that pushing for the LNG project now depends on the incoming Administration in the Philippines.
He explained that the current problem now in the country is that power projects have to go through bidding, which means the government will often select the company that offers the cheapest cost. Moreover, LNG cannot provide competitive prices yet because coal is still cheaper.
As early as 2011, PTT Philippines had already expressed interest in putting up a 1,200-megawatt (MW) LNG facility in Limay, Bataan.
Chawalitanon said that the LNG project investment could cost about $2 billion for the entire integrated project.
“We see the opportunity in the Philippines. Since the country needs more energy alternatives as the economy improves, the power demand rises,” he said.