17/10/2012 (Bangkok Post) - Bangchak Petroleum Plc (BCP), the state majority-owned oil refiner and retailer, will invest 1.2 billion baht in two biodiesel projects, says president Anusorn Sangnimnuan.

Speaking yesterday, he said Bangchak will double its capacity of pure biodiesel or methyl ester (ME) at its plant in Ayutthaya's Bang Pa-in district to 600,000 litres a day at a cost of 800 million baht.

Downstream biodiesel production will commence next year before commercial operations start in 2014.

The company will also spend 400 million baht on upstream biodiesel production by building a palm oil crushing plant in Pathum Thani's Rangsit area.

Dr Anusorn said Bangchak requires 500,000 litres a day of ME to blend with petroleum diesel, but its existing production capacity is less than this.

"Biodiesel will play a significant role in the government's renewable energy promotion plan, which sets a target of renewable energy contributing 25% of the total energy mix by 2020," said Dr Anusorn.

To achieve this target, the government will have to increase the proportion of ME blended with diesel by another one to two percentage points to 6-7% in the coming years.

"The Rangsit area does not have enough oil palms at the moment to warrant a crushing plant. We're waiting for enough trees have an economy of scale," said Dr Anusorn.

Meanwhile, Bangchak is set to resume full operations to 110,000 barrels per day, up from 45,000 bpd at its Bangkok oil refinery, which was damaged by fire this year. Dr Anusorn said losses from the fire are less than the earlier estimate of 500 million baht.

With the global oil price surpassing US$100 a barrel in the second half of this year, Bangchak expects its gross refinery margin will rise to $7-8 a barrel by year-end from $6 in the first half.

The company will also increase its oil refinery capacity by 16% to 140,000 bpd from 120,000 bpd.

Shares of BCP closed yesterday on the Stock Exchange of Thailand at 23.90 baht, up 30 satang, in trade worth 43.6 million baht.