July 4, 2012:

Bangchak Petroleum PCL (BCP.TH) is confident that the closure of its sole refinery for a week after a fire Wednesday at a crude distillation unit will have only a minimal impact on adjusted earnings before interest, tax, depreciation, and amortization this year. EBITDA will likely fall by 300 million-400 million baht ($9.5 million-$12.6 million) if the CDU has to remain closed for three months, President Anusorn Sangnimnuan told reporters Wednesday. The company's net profit was THB5.6 billion last year and it previously targeted an EBITDA of THB7 billion for 2012. Bangchak plans to import around 15,000 barrels a day to run its hydrocracker at its full capacity of 25,000 barrels a day, Mr. Anusorn said. The hydrocracker is a major source of revenue for the company.

He also said the company has no plan to relocate its refinery from the existing site--despite public concerns over its location in the nation's capital--as it would involve a hefty investment. The company said it needs to shut down the entire refinery for a week to investigate the cause of the fire. Equipment at the CDU, with a refining capacity of 80,000 barrels a day, was ignited around 0020 GMT and the fire was put out an hour later. The refinery has a maximum crude processing capacity of 120,000 barrels a day--about 10% of the country's total refining capacity. Bangchak's average refining capacity this year will likely fall to 90,000 barrels a day, below a previous target of 94,000-95,000 barrels a day.

Mr. Anusorn said the company would need at least 1-2 months to fix the CDU, and around 3 months if the unit's tower needs to be replaced. The company will also halve fuel oil exports to the spot market to 30 million liters a month, he said, adding that it won't cut sales to buyers under contracts. State-owned energy conglomerate PTT PCL (PTT.TH), which owns 27.2% of Bangchak, will boost supply to compensate for Bangchak's lost production to prevent a local supply shortage, Nuttachat Charuchinda, chief operating officer, downstream petroleum business group, said.

By Dow Jones Newswires