PTTEP: Going Down from Upstream to Midstream

Among the subsidiaries of PTT Public Company Limited (PTT), the good overall performance of those was PTT Exploration and Production Public Company Limited (PTTEP), as it’s the largest contributor to PTT‘s earnings (despite having some effect from Covid-19 pandemic).

 

As PTT is a fully integrated petroleum and petrochemical company that operates and invests in various businesses through its subsidiaries, PTT hence divided its subsidiaries into three major components; upstream, midstream and downstream.

 

PTTEP is considered as the upstream sector of PTT as it’s a petroleum exploration and production company, the primary step in the refining process. 

 

PTT Global Chemical Public Company Limited (PTTGC), Thai Oil Public Company Limited (TOP), IRPC Public Company Limited (IRPC) and Global Power Synergy Public Company Limited (GPSC) are classified as PTT’s midstream arm. 

 

Meanwhile, PTT Oil and Retail Business Public Company Limited (OR), which is set to be listed on the Stock Exchange soon, operates as the downstream business of PTT’s group.

 

Regarding PTT group’s five-year investment plan…the group will focus on 1) business diversification and 2) creating value-added and synergy among PTT Group.

 

It could be obviously seen in the recent PTTEP announcement that the firm has received an exclusive right to develop the Gas to Power Project with the installed capacity of 600MW in Myanmar. The investment is worth approximately 2 billion US Dollars or 60,000 million baht. 

 

Interestingly, the aforesaid project is a combined energy project from upstream to power generation which includes upstream development project, petroleum exploration and development, gas-to-power production and pipeline route construction.

 

This is a new business milestone of PTTEP.

 

As it’s an integrated energy project, possibly to see the synergy between PTTEP and its partner in the future. 

 

The generated power from the project will be sold to Myanmar’s state authority, over a 20-year term with a 5-year extension from the COD. As the result, PTTEP has another recurring income, reinforcing the stability to the company’s revenue.  

 

Currently, PTTEP has several gas fields in Myanmar such as Zawtika Project and Myanmar M3 Project, which significantly benefit the company’s cost and profit margin.

 

In addition, this is a remarkable step of PTTEP into the midstream sector.