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Thaioil Plans to Build Large Ethanol Plant: Using Cassava Roots to Help Farmers

Posted on: Wednesday, 21 September 2005, 12:00 CDT

Sep. 21--Thai Oil Plc yesterday announced plans to invest between US$150 million and $250 million in a large ethanol plant to cash in on the booming sales growth of gasohol, the alternative fuel for automobiles.

PTT Plc, meanwhile, said it may completely phase out its premium petrol sales next year, one year ahead of the government's intention as the local gasohol market is growing significantly.

Thaioil president Piti Yimprasert said the company, a refinery operator majority-owned by PTT, was keenly interested in making ethanol from cassava roots now that more motorists were shifting to gasohol to help save money.

Gasohol 95 costs 1.50 baht per litre less than premium or octane 95 gasoline.

"We have talked with our strategic partners to study a cassava root-based ethanol project due to the abundant supply of raw material," Mr Piti said.

The company is confident local cassava root production will sufficiently meet the demand of the ethanol plant because each year Thailand exports large volumes of tapioca chips processed from cassava.

The ethanol project, he said, would not only benefit farmers in terms of increased income, but waste from cassava roots after processing into ethanol could be used as fuel for electricity production.

The ethanol plant would have a daily capacity of 1-2 million litres, considered appropriate to achieve economies of scale.

"We are ready to invest in the ethanol project, and we will accelerate carrying it out since ethanol supply is scarce, which has forced the government to import it in order to meet the rising demand," said Mr Piti.

PTT, meanwhile, says that gasohol 95 sales were approaching half of its total sales of all octane 95 fuel. As a result, executive vice-president Chaiwat Choorit said, the company may stop selling premium petrol ahead of schedule, once its sales of gasohol 95 reach 55 million litres per month.

The state-owned oil company now sells 30 million litres per month of gasohol 95 and 35 million litres of premium petrol.

Sales of gasohol 95 are expected to increase significantly after PTT gasohol plus 95, the new biofuel product which PTT claims has the same quality as premium petrol, has been launched recently.

"It's possible that PTT may entirely stop selling premium petrol next year, one year faster than the government's declaration to phase out the fuel in 2007," said Mr Chaiwat.

PTT has stopped selling premium petrol at several stations in Bangkok and surrounding provinces. Gasohol 95 is now available at 650 PTT stations, half of its total nationwide.

To support the use of gasohol, PTT made it clear at any stations where underground tanks were insufficient to store both fuels, only gasohol 95 would be kept.

Energy Minister Viset Choopiban said the government was sticking to its existing timetable to phase out sales of premium gasoline by 2007.

"We have no plan to speed up the policy as we have to monitor the supply side of ethanol," he said.

At present, there are only three ethanol producers with a combined output of 350,000 litres per day, sufficient to make 3.5 million litres per day of gasohol and just enough to meet current local demand.

Shares of Thaioil (TOP) closed yesterday at 73.50 baht, up 2.50 baht, in trade worth 1.15 billion baht. PTT shares rose 10 baht to 248, in trade worth 1.83 billion baht.

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PTT,

Source: Bangkok Post

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