Thai Oil starts up first linear alkyl benzene plant

BANGKOK (Reuters) -- Thai Oil, Thailand's top oil refiner, said on Thursday it had started operations at the country's first linear alkyl benzene (LAB) plant in late February and that it should help boost margins this year.

LAB is an organic compound used as an intermediate in the production of surfactant or detergent. The $400 million plant is also the first fully-integrated LAB plant in Southeast Asia, chief financial officer (CFO) Pattaralada Sa-ngasang told reporters.

Thailand imports about 70,000-80,000 tpy, and domestic LAB demand is expected at reach 79,000 tons in 2016, she said, adding that Thai Oil is targeting a domestic market share of 70 to 80%.

Thai Oil, through its wholly-owned unit Thai Paraxylene Co., joined with Japan's Mitsui & Co to form a joint venture, Labix Co., in 2013 to build the LAB plant at Chonburi in eastern Thailand.

The plant has production capacity of 100,000 tpy, and the Thai refiner plans to export half of the output to India and other Southeast Asian countries, she said.

The company also plans to start operating two power plants with a total capacity of 239 megawatts in the second quarter, when they will start to generate profit and boost margins, Pattaralada said.

The company spent $380 million to build the natural gas-fired power plants, and 80% of the capacity will be sold to the state-run power distributor, with the other 20% used internally, she said.