Bangkok--7 Mar--PTT International
In relations to recent news about PTT’s investment in Egyptian Gas Pipeline business via PTT International Company Limited, Mr. Supattanapong Punmeechaow, Executive Vice President — Business Development of PTT International, clarifies that prior to investment, PTT has spent more than 8 months evaluating the investment in various aspects. The evaluation included gas demand and supply, potential to expand market, potential operational synergy with PTTEP should it develop new fields in the country, as well as thorough assessments of technical aspects, risks relating to international policy and other key risks. According to the assessment, the project is a sound investment.
East Mediterranean Gas (EMG) operates gas pipeline business and was set up under the Peace Treaty and MOU Relating to the Transmission of Natural Gas through Pipeline between Egypt and Israel. EMG purchases gas from Egypt and sells to power producers and other industrial users in Israel. EMG has constructed a 90-km offshore gas pipeline connecting Al-Arish Gas Station in Egypt to Ashkelon Gas Terminal in Israel.
Mr. Supattanapong adds, “In early February, there was an explosion incident on a gas pipeline in Al-Arish. This happened to the gas pipe of EGAS, the national gas company of Egypt, and was about 30-km away from EMG’s gas facilities. As safety measure, EMG has temporarily stopped gas delivery while EGAS shuts down its gas pipeline system for repair and maintenance. We expect little adverse impact from the incident, because EMG can ramp up its sales volume in accordance with the sales contracts once business resumes again soon”
PTT International is a 100% owned subsidiary of PTT Plc. Established in 2007, PTT International was a result of PTT’s aim to create more clarity for investors and to be the driving vehicle for PTT’s international business expansion in the future.
Mr. Supattanapong concludes that PTT International has established only for 3 years, and its investments are starting to yield profits. EMG, for example, began to realize profits in 2010 and is expected to continue to perform better as typical of such investment. He adds, “PTT International has net loss in 2010, as a result of interest expenses paid to PTT and unrealized loss from the strengthening of the Baht by about 10% in the period, totaling 2,500 million Baht. We have already taken measures to mitigate against such FX fluctuations in the future.”