Thailand Banpu adapts capex plan in response to pandemic
Source：Bangkok Post Newspaper
From：Taiwan Trade Center Bangkok
Update Time：2020/06/29
SET-listed private energy firm Banpu Plc says it will cut capital expenditure 20% to under US$800 million over the next five years by cancelling or delaying new projects in response to the Covid-19 pandemic.
Banpu chief executive Somrudee Chaimongkol said the group will focus only on ongoing development projects and energy technology projects under the Banpu Next brand, while asset acquisition will be suspended for the foreseeable future.
The group also plans to keep cash on hand high in preparation for worst-case scenarios. Banpu has $300 million in its savings account and $400 million approved in loans from several banks to acquire shale gas resources in the US.
"Although coal and gas sales were hardly impacted by the crisis, we must be careful in case the situation worsens by cutting unimportant expenses and reducing the investment budget for projects that don't need to be rushed," Ms. Somrudee said.
She said the company had planned to officially launch its new subsidiary Banpu Next Co in April but had to postpone it because of the viral outbreak.
Banpu Next will focus on renewable energy like solar rooftops, energy storage systems, smart grids and electric vehicles.
"There is very likely to be a deep recession this year across the world following the pandemic," Ms. Somrudee said.
She said three current projects in development are a shale gas project in the US, a coal-fired power plant in China and a wind farm in Vietnam.
Banpu has to pay a further $400 million for the Barnett shale gas project after the seller and the buyer amended the acquisition price from an earlier estimation of $770 million down to $570 million. The company already made the first payment of $170 million.
The transaction is expected to be completed by the end of the year and will increase Banpu's gas production to 700 million standard cubic feet per day (MMSCFD), up from its existing shale gas operation in the Marcellus shale gas formation of 200MMSCFD.
It is also in the process of constructing the Shanxi Lu Guang power project (SLG) in China with a capacity of 396 megawatts. Construction is 80% complete and the plant is expected to commence commercial operations in the fourth quarter this year, following a brief delay.
The third project is Unit 1 of Vietnam's Soc Trang wind power farm project with 30MW capacity, which began construction in December last year and is expected to begin operations in the fourth quarter of this year.
Ms. Somrudee said that for the domestic power market, the group will focus on public awareness of products under its Banpu Next brand.
Source：https://www.bangkokpost.com/