Thai Oil Accelerates CFP Project, Aims for New Business in 4-5 Years

MGR Online•Economy•253d ago

Reader Briefing

Thai Oil's Clean Fuel Project is back on track, projected to be completed ahead of schedule, boosting refining capacity and shifting focus to new, high-margin, low-carbon businesses.

•Thai Oil's Clean Fuel Project (CFP) is accelerating construction after resolving contractor issues and cost overruns, with an updated investment of USD 7.151 billion.
•The project is now expected to complete construction ahead of schedule, by Q2 2028, and commence commercial operations by Q3 2028, increasing refining capacity by 40%.
•Thai Oil plans to leverage the CFP for strategic growth, focusing on high-margin specialty chemicals and low-carbon energy solutions like SAF and hydrogen, aiming for these segments to contribute 20% of profits by 2035.

Overview

•Construction of the Clean Fuel Project (CFP) resumed in Q3 2025.
•By Q1 2026, 15,000-18,000 workers are expected to be on-site for the CFP.
•The CFP's utilities and crude distillation unit 4 (CDU-4) are scheduled for completion in Q2 2770, ahead of the original Q3 2571 target.
•The CFP project is 8-9% complete on its remaining work as of January 2026, with civil works and key equipment procurement at 97% completion from the original contractor in 2025.
•The CFP's total investment value has risen to USD 7.151 billion.
•Thai Oil appointed Wood PLC as an EPCM service provider to manage multiple engineering and procurement contractors for the CFP.
•The CFP will increase Thai Oil's refining capacity from 275,000 to 400,000 barrels per day, a 40% increase.
•The CFP is designed to support the Energy Transition by refining heavier, cheaper crude oil and producing more diesel and jet fuel, while reducing reliance on gasoline and fuel oil.
•The CFP is crucial for Thai Oil's long-term competitiveness, enabling the processing of cheaper heavy crude oil from regions like Canada, the Middle East, and Venezuela.
•The CFP is expected to add USD 4-5 per barrel to Thai Oil's refining margin (GRM).
•Thai Oil is confident the CFP will be a 'Game Changer' and align with its '2S1P' strategy: Strengthening the Core, Sustaining the Future, and Powering the Platform.
•Phase 1 (2025-2029) of the '2S1P' strategy focuses on completing the CFP on time and within budget.
•Phase 2 (2030-2034) of the '2S1P' strategy will focus on new, high-margin, low-carbon businesses.
•Thai Oil targets for S2 and P businesses to contribute approximately 20% of total profits by 2035.
•A 15% reduction in greenhouse gas emissions from 2023 levels is targeted by 2035.
•For 2026, Thai Oil forecasts a GRM of USD 7-8 per barrel, boosted by its aromatics, LAB, and lubricant businesses.
•Thai Oil is currently operating at 103% capacity in 2026, up from 100% in 2025, due to no planned maintenance.
•Thai Oil's parent company, PTT, is seeking strategic partners for its refining and petrochemical group, including Thai Oil.
•Thai Oil will only consider partners who add value to the organization, not for financial investment as Thai Oil has ample liquidity.
•Thai Oil has cash reserves of approximately USD 1 billion and USD 600 million from perpetual bonds.
•Thai Oil's capital expenditure for 2026 is mainly allocated to the CFP, estimated at USD 1.2 billion.
•Thai Oil targets an EBITDA of USD 700 million for 2026.
•The company had reduced its debt burden by USD 1.5 billion (approximately 45 billion THB) as of 2025.
•Thai Oil's Net Debt/EBITDA ratio has decreased from 5.8 to 4.8.
•The Debt-to-Equity (D/E) ratio was 0.7 in Q3 2025, below the target of 1.
•Thai Oil's total debt has decreased from USD 4.4 billion at the beginning of 2025 to USD 2.9 billion currently.
•Thai Oil successfully issued USD 600 million in perpetual bonds in 2026, with demand exceeding the offering by nearly 11 times.
•The perpetual bonds have a coupon rate of 6.1% per annum for the first 5.25 years, effectively 3.875% after FX swap.
•Thai Oil repurchased USD 475 million of its US Dollar bonds in early 2026, realizing an estimated USD 75 million in gains to be booked in Q1 2026.
•Thai Oil will focus solely on completing the CFP project over the next 4-5 years, with no investment in new businesses during this period.

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Key Quotes

Bandhit Thamprajamchit

"The Clean Fuel Project (CFP) has now resolved its issues and passed its lowest point."

ขณะนี้โครงการพลังงานสะอาด(โครงการCFP ) ถือว่าได้รับการแก้ไขปัญหาและผ่านจุดต่ำสุดมาแล้ว

Bandhit Thamprajamchit

"The CFP project is a Game Changer for Thai Oil."

โครงการCFP เป็นGame Changer ของไทยออยล์

Key Entities

Organization

Thai Oil(ไทยออยล์)ℹ️

A major Thai oil refining and petrochemical company undertaking the significant Clean Fuel Project (CFP).

Wood PLCℹ️

An EPCM service provider appointed by Thai Oil to manage multiple engineering and procurement contractors for the CFP.

TOPℹ️

An abbreviation and ticker symbol for Thai Oil Public Company Limited, used interchangeably in the article.

TOPNEXTℹ️

A subsidiary of Thai Oil focused on expanding sales channels and regional market penetration.

PTT(ปตท.)ℹ️

Thai Oil's parent company, which is seeking strategic partners for its refining and petrochemical group.

PT Chandra Asri Petrochemical Tbk (CAP)ℹ️

An Indonesian petrochemical company in which Thai Oil has a stake, with no plans for further stock sales mentioned.

Person

Mr. Bandhit Thamprajamchit(นายบัณฑิต ธรรมประจําจิต)ℹ️

CEO and President of Thai Oil, providing updates and insights on the CFP and company strategy.

Ms. Wanida Boonpiruk(นางวนิดา บุญภิรักษ์)ℹ️

Executive Vice President of Finance and Accounting at Thai Oil, discussing financial performance and debt management.