NGV pipeline to resume

       PTT Plc will resume work on a 30-billionbaht onshore pipeline to meet rising demand for natural gas for vehicles (NGV), in response to government policy to promote the fuel.
       In exchange, the government will allow the state Oil Fund to subsidise the retail price of NGV by 300 million baht per month or equivalent to two baht per kilogramme, according to Energy Minister Wannarat Channukul.
       The subsidy offer is a response to lobbying by majority state-owned PTT,which has been losing money because of government efforts to keep NGV cheap and encourage its use. NGV retails for 8.50 baht a kilogramme but PTT says that its costs are 12.50 baht.
       "We decided to subsidise the fuel in return as we want PTT to have enough of a margin to invest in more facilities to serve the government's policy to promote natural gas in the transport sector,"Mr Wannarat said.
       "This is crucial for us since we believe that oil prices will keep rising, while we have to discourage motorists from using more liquefied petroleum gas (as an alternative to petrol and diesel). We have enough of a burden from importing LPG to fill their tanks."
       LPG is also heavily subsidised but the original intent was to help households and food vendors who use the gas for cooking.
       PTT is expected to start building the 30-billion-baht gas pipeline next year,Mr Wannarat said. It will also scale down the project, cutting a planned link to the southern provinces and lowering the cost from 55 billion.
       One route costing 18 million baht will run for 200 km from Ayutthaya to Nakhon Sawan. The second 150-km route costing 12 billion baht will run from Saraburi to Nakhon Ratchasima.
       PTT had earlier announced a plan to delay its onshore pipeline extension given lower gas demand in the slumping economy.
       Wichai Pornkeratiwat, a PTT executive vice-president, said the company planned to expand NGV service stations to 400 from 337 now operating.
       NGV consumption is expected to rise 27% from current levels to 4,600 tonnes per day by the end of this year, as more drivers seek to switch from costly petrol and diesel.
       PTT also wants government tax support for its investment in corporate social responsibility projects, said vicepresident Tevin Vongvanich.
       Speaking at a seminar on CSR, he said investments in cleaner energy to address social and environmental problems were lifting its costs.
       "To encourage the private sector to keep its responsibility to society, the state can lend us support, maybe through tax measures that would help us reduce costs," he said.
       Mr Tevin noted that PTT, as the fuel market leader, always faced pressure from the government to keep prices low, which was a form of CSR as it helped consumers. But complying is getting harder since, as a listed company,it was expected to deliver returns to shareholders, he added.
       "If we didn't need to be concerned over the well-being of society and the environment, we could make at double or triple our current profits," said Mr Tevin.
       PTT earned 27.34 billion baht in profit in the first half of this year, down 51%from a year earlier.
       PTT shares closed yesterday on the Stock Exchange of Thailand at 236 baht,up four baht, in trade worth 1.85 billion baht.