Breaking News! PSTC Is Ready to Initiate ฿9bln. Fuel Pipeline Project with IRR over 12%!!
PSTC will need approvals from the Extraordinary General Meeting of Shareholders on January 11, 2018 to initiate its ฿9 billion investment in the Fuel Pipeline Transportation System to North Eastern Region Project.
According to the Board of Directors’ Meeting of Power Solution Technologies Public Company Limited (PSTC), the Boards has approved the investment in the Fuel Pipeline Transportation System to North Eastern Region Project (Project) by Thai Pipeline Network Company Limited (TPN), its subsidiary of PSTC that indirectly held by Biggas Technology Company Limited (BIGGAS) (PSTC held approx. 51% of BIGGAS shares and BIGGAS held 100% of TPN shares)
This project is to expand from existing pipeline of Thai Petroleum Pipeline Company Limited (Thappline) to North-Eastern Region. The project distance is 350 km. which total investment cost approx. ฿9,201.10 million. The construction will be commencing in 2Q19 with approx. duration in 30 months.
The commercial operation date is tentative at year-end 2021. By this, the investment in this project will enhance PSTC business to basic infrastructure for fuel transportation to North Eastern Region and other business relating to Fuel type. It also will create opportunity to generate more revenue and profit and to support its business expansion of PSTC.
In addition, the investment will provide PSTC as completely integrated energy company according to PSTC’s policy and vision. Besides, it provided benefit to Public sector and overall Country by creating energy stability for the Country, increasing fuel transportation efficiency with competitive price, reduce the road accident from large fuel transportation truck and also reduce pollution which help environmental improvement.
The determination of the fuel pipeline transportation system to North Eastern Region Project total value is based on its return and generally accepted valuation approach by the financial advisor (Trinity Securities Co., Ltd.). PSTC deems that discount cash flow is the appropriated valuation approach of the transaction with IRR of approx. 12.12% which is higher than the current cost of equity of PSTC of 7.75% which reflects business operation as compared with Bangkok Aviation Fuel Services Ple., Co.
Nevertheless, such project and transaction will need an approval from the Extraordinary General Meeting of Shareholders, which will be held on January 11, 2019.