-TRANSLATION- 1 Table of Content 1. GENERAL INFORMATION ................................................................................................................ 5 2. TYPES OF BUSINESS AND BUSINESS OPERATIONS ................................................................... 7 2.1 PRODUCT CHARACTERISTICS .......................................................................................................... 9 2.2 REVENUE STRUCTURE .................................................................................................................. 11 2.3 TARGET CUSTOMERS.................................................................................................................... 12 2.4 DISTRIBUTION CHANNELS.............................................................................................................. 13 2.5 SOURCES OF SUPPLY ................................................................................................................... 14 2.6 MARKET COMPETITION ................................................................................................................. 14 2.7 ENVIRONMENTAL IMPACT .............................................................................................................. 20 3. SUMMARY OF THE ESSENCE OF THE CONTRACTS/AGREEMENTS TRANSFERRED FROM PTTAR TO THE COMPANY .............................................................................................................. 21 3.1 FEEDSTOCK AGREEMENTS ............................................................................................................ 21 3.2 PETROLEUM PRODUCTS AND AROMATICS PRODUCTS OFFTAKE AGREEMENTS................................. 22 3.3 UTILITIES AGREEMENTS ................................................................................................................ 23 3.4 LAND LEASE AGREEMENTS ........................................................................................................... 24 4. SUMMARY OF THE ESSENCE OF THE CONTRACTS/AGREEMENTS TRANSFERRED FROM PTTCH TO THE COMPANY ............................................................................................................. 24 4.1 AGREEMENTS RELATING TO THE OLEFINS-SHARED FACILITIES ........................................................ 24 4.2 SALES AGREEMENTS IN RELATION TO SERVICE BUSINESS AND OTHERS ......................................... 26 4.3 AGREEMENT RELATED TO THE POLYMER PRODUCTS VALUE CENTER .............................................. 28 4.4 LEASE AGREEMENTS .................................................................................................................... 28 5. FUTURE PROJECTS......................................................................................................................... 29 6. TECHNICAL AND MANAGEMENT ASSISTANCE .......................................................................... 30 7. CONNECTED TRANSACTIONS ....................................................................................................... 31 8. DEBTS AND FINANCIAL OBLIGATIONS ........................................................................................ 36 8.1. LONG-TERM CREDIT FACILITIES AGREEMENTS ASSUMED FROM PTTAR ......................................... 36 8.2. WORKING CAPITAL CREDIT FACILITIES AGREEMENTS ASSUMED FROM PTTAR ............................... 40 8.3. DEBENTURES ASSUMED FROM PTTAR ......................................................................................... 42 8.4. LONG-TERM CREDIT FACILITIES AGREEMENTS ASSUMED FROM PTTCH ......................................... 42 8.5. WORKING CAPITAL CREDIT FACILITIES AGREEMENTS ASSUMED FROM PTTCH ............................... 44 8.6. DEBENTURES ASSUMED FROM PTTCH ......................................................................................... 46 8.7. LIABILITIES WHICH MAY ARISE FROM TAX ASSESSMENTS................................................................. 48 8.8. WARRANTS .................................................................................................................................. 48
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1
Table of Content
1. GENERAL INFORMATION ................................................................................................................ 5
2. TYPES OF BUSINESS AND BUSINESS OPERATIONS ................................................................... 7
Plc. (“UCHA”). The selling prices for such products are per market prices.
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2.3.1.3 Polymer Products
The Company has entered into an agreement to sells HDPE through PTT
Polymer Marketing Co., Ltd (“PTTPM”), with the HDPE sale agreement period of 6
months, and can be extended 1 year per time. On 27 September 2006, both parties
have changed such contract into a 15 years long-term contract, extendable 5 years
per time, with price equaled to the terms of the original contracts.
2.3.1.4 Ethylene Oxide Products
The Company sales its products mainly to domestic customers through
direct sales, brokers and distributors. The remaining products will be export to the
international market. The selling prices for such products are per market prices.
2.3.1.5 Oleochemical Products
A. Methyl Ester Products
Major customers for Methyl Ester products are those domestic refinery
customers, which include PTT, Chevron (Thai) Co., Ltd., ESSO (Thailand) Plc.
(“ESSO”), Thaioil Plc. The selling prices for such products are per market prices.
B. Fatty Alcohol
Major customer for Fatty Alcohol products is Thai Etoxilate Co., Ltd.
(“TEX”). The Company also exports such products to sale in the international market.
The selling price for such product is per market price.
C. Glycerin
Major customers for Glycerin are mainly international customers. The
Company’s export to domestic sales proportion is 70% and 30% accordingly. Most
Glycerin products are sold mainly through distributors. The selling price for such
product is per market price.
2.3.2 Refining and petroleum products supply sourcing
The Company’s major customer for such products is PTT, and selling price is per
market price.
2.3.3 Services & Others
The Company’s major customers are petrochemical and shared facilities plants.
Currently, such customers include TPE, TPC, HMC and other customers in Map Ta Put
Industrial Estate.
2.4 Distribution Channels
The Company sells products under the long-term and short-term contracts, as per details
in 3.2 Petroleum Products and Aromatics Products Offtake Agreements, 4.1 Agreements relating
to the Olefins-Shared Facilities, 4.2 Sales Agreements in Relation to Service Business and
Others and 4.3 Agreement related to the Polymer Products Value Center.
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2.5 Sources of Supply
The Company sources its supply of feedstock under the long-term and short-term
contracts, as per details in 3.1 Feedstock Agreements and 4.1 Agreements relating to the
Olefins-Shared Facilities.
2.6 Market Competition
2.6.1 Petrochemical and Chemicals
2.6.1.1 Olefin & Shared Facilities
Olefin price in first half 2011 had continuously increased from second half
of last year. The average ethylene price in South East Asia during the first half 2011
was at USD1,265 per ton, which was higher than that of the same period from
previous year by approximately 7%. On the other hand, the average propylene price
was at USD1,433 per ton, which was higher than that of the same period from
previous year by approximately 24% (Source: ICIS).
The increase in ethylene price during the first half 2011 was mainly due to
the limited supply, as plants in many countries in the region had reduced/halt their
planned production capacity. The limited supply also resulted from unplanned
reduced/halt in production as a result from the earthquake in Japan, as well as many
fire accidents at the Formosa Petrochemical Corporation’s plant in Taiwan. Such
incidents decreased the ethylene supply from the market by approximately 1.73
million tons (Source: CMAI). In addition, other Middle East producers, especially
those in Iran, reduced the amount of supply exported to Asia, as those producers
also faced their own production problems. On the other hand, the demands for
products, especially downstream products such as PE and MEG, had been on an
increasing trend. The main reason for the increase in the demand was resul from the
turnaround of Shell Chemical’s cracker plant in Singapore, and as a result, MEG
plant of such company needed to find Ethylene from the spot market for its
production.
The propylene market in Asia during the first half of 2011 was similar to
that of Ethylene. However the impact of limited supply was more severe, due to 4 on-
purposed propylene production plants (propylene production units that yield
propylene as their main products) in Asia with the capacity of 950,000 tons per year
had stopped or reduced their operations, for schedule and nonschedule maintenance
due to production problems and the above mentioned shutdown of cracker plants. As
a result, the production of propylene decreased by 1.04 million tons (source : CMAI).
In addition, the demand for such product was still at a high level. These factors
contributed to the higher Propylene price in Asia than that of Ethylene.
In the second half of 2011, there will be seasonal factors that will increase
the demand, as middle and downstream producers require more feedstock for their
productions in preparation for Christmas and New Year holidays. On the other hand,
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the supply may also be limited as cracker plants in many countries, such as China,
Japan, Taiwan and Singapore, will have turnaround. Moreover, operations of new
capacity have been postponed and will, instead, start up their productions next year.
Consequently, these factors will result in the Olefin price expected to be at a high
level. However, the economic problems in the United States as well as many
countries in Europe combined with inflation factors in China may have impacts on the
prices of crude oil and petrochemical products, which, in turn, may slow the demand
for Olefin’s products. As a result, the price of Olefin will not substantially increase in
the second half of 2011 due to these important factors.
2.6.1.2 Aromatics Products and Downstream Business
The price of Paraxylene and Benzene during the first half of 2011 had
continuously increased from year ended 2010, especially during first quarter of 2011,
where the Paraxylene price was at its highest level in 16 years, due to limited supply
as a result of the earthquake in Japan. On the other hand, the demand for such
products was still at a high level due to long winter and Chinese New Year. In
addition, Aromatic plants in many countries, such as China, Malaysia and the Middle
East countries, such as Oman and Kuwait had undertook unplanned shutdown. As a
result, the price of Paraxylene and Benzene had continuously maintained at a high
level. However, in second quarter of 2011, the price faced a downward pressure
from the increase in supply, as a result of Aromatics plants in China and South
Korea started their commercial operations, adding 2 million tons of capacity per year.
However, in the second half of 2011, the price of Aromatics products will remain at a
high level, due to seasonal demand as middle and down-stream Paraxylene and
Benzene producers will require more feedstock for their productions in preparation for
various holidays. Moreover, Purified Terephthalic Acid plant in China with the
capacity of 3.5 million ton per year will start its commercial operation in the second
half of 2011. Such plant will require paraxylene as its main feedstock, while there will
be no new supply of Paraxylene in the market. These factors contribute to the
forecast that the demand for the Aromatics Products in second half of 2011 will
remain strong.
2.6.1.3 Polymer Products
Price of Polyolefin products during the first half of 2011 had continuously
increased from year ended 2010. The average price of HDPE, LDPE, LLDPE and
Polypropylene (PP) were USD1,381 per tons, USD1,402 per ton, USD1,707 per ton
and USD1,655 per ton accordingly, and such prices had increased from the previous
year by approximately 10%, 5%, 18% and 23% respectively.
The increase in Polyethylene price during the first half of this year was
due to important factors, such as oil price, feedstocks prices and limited supply in
the region (resulting from the reduction of HDPE production in China in May and
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June). On the other hand, the demand for such products had decreased due to
plastic processing plants’ reduction in their production capacity (as the demand for
end-products decreased during the long Chinese New Year holiday in February),
China’s stricter policy in extending loan and the inability of PE producers to adjust
their prices at the same rate as that of the increased in Ethylene price.
For the remaining of 2011, the price of Polyolefins will increase as the
demand for products will increase from the downstream producers, who will increase
their productions in preparation for various end of the year festivals. In addition, with
the price of feedstock remain at a high level and many Olefin plants will stop their
operations for maintenance during the second half of this year, the supply of such
products will be limited. However, the economic problems in the United States and
many countries in Europe, as well as the inflation pressure in China, may decrease
the demand for Polyolefin. As a result, the price of Polyolefin may not increase by
much during the second half of 2011.
On the other hand, the overall market conditions for PP and PS will have
an upward trend with regard to price, because the price of Propylene and Styrene,
which is their feedstock, have been on an increasing trend (similar to that of PE).
The demand will also increase during the Christmas and New Year Holiday, but
there will be many other factors that may soften the increase in price for such
products, similar to that of PE.
2.6.1.4 Ethylene Oxide Products
The MEG market in the first half of 2011 moved toward the same trend as
those of Olefin and Polyolefin. MEG price had increased to USD1,185 per ton, an
increased by 33% from the same period of last year.
During the first quarter of 2011, the price of MEG products increased
from the limited supply, as the demand for products used in Polyester Fiber and
PET Resin industries had continuously increased, while there was no new supply
capacity in 2011. For the second quarter of 2011, MEG’s price had slightly
decreased due to the inflation problem in China, which resulted in producers
producing limited MEG supply, just enough to serve the demand of the consumers
with no inventory storage. Such factors slowed the demand for MEG products. In
contrast, during the later part of the second quarter of 2011, 4 MEG plants with the
capacity of 1.8 million ton per year owned by Nan Ya Plastics shutdown for security
inspections per government’s orders due to fire accidents at the petrochemical
complex owned by Formosa Petrochemical Corporation. However, such incident will
not increase the demand by much.
For the second half of 2011, the price of the MEG is estimated to be at a
high level as a result of a higher demand from Polyester producers due to the
seasonality. In addition, the ethylene feedstock price is on an upward trend, as a
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result of crude oil price. Moreover, many of the MEG plants in the region, including
Taiwan, China and countries in the Middle East will shutdown for maintenance
during the second half of the year, which will, in turn, limit the supply until the end of
2011.
As for the Ethanolamine market during the first half of 2011, the price had
slightly increased from the end of 2010, because the price of feedstock had increased.
Moreover, the price of Ethylene Glycol products had significantly increased as compared
to year 2010. Such increased in prices gave incentive to most producers to use
Ethyleneoxide to produce a higher proportion of Ethylene Glycol, and, as a result, might
have reduced the supply of Ethanolamine in the beginning of the year. On the other
hand, the overall demand for MEA and TEA products was on an increasing trend.
However, for DEA products, such demand was still slow due to the laggard Glyphosate
market and during the second quarter, there were two new Ethanolamine plants in China
started their commercial operations, which resulted in higher supply in the market. In
addition, the inflation control policy from the Chinese government had impacted the
industry domestically, resulted in the reduction of prices. However, it is foreseen that
toward the end of 2011, the price may increase due to higher feedstock price.
2.6.1.5 Oleochemical Products
A. Methyl Ester Market
The price of crude palm oil, which was used in the price calculation
formula of Methyl Ester, had fluctuated widely in the first half of 2011. During the
first quarter of 2011, the domestic crude palm oil price increased significantly due to
volatile weather pattern and flooding in the southern part of the country. However,
the government had solved such problems by importing crude palm oil from the
international market, and the domestic production of palm had gradually improved
to the level that is enough for domestic consumption. This later factor resulted in the
decrease in price of crude palm oil in March. These fluctuations resulted in the price
of Methyl Ester to increase significantly in the early part of the year, and
subsequently reduced in March. During the second quarter, the price of Methyl Ester
had reduced significantly following the reduction of domestic crude palm oil price.
The problem of insufficient amount of crude palm oil supply resulted in an
unclear policy regarding the use of crude palm oil as an alternative source of
energy. The government had canceled its enforcement of 2 grades biodiesel in
January (cancelling the subsidy for biodiesel B5), adjusted to one usage of biodiesel
B3 grade in February, and subsequently in March and April adjusted to one usage of
biodiesel B2 grade. The adjustment of biodiesel usage resulted in a significant
reduction in Methyl Ester demand. However, once the crude palm oil crisis had
lapsed, and the crude palm oil inventory had increased, the usage of biodiesel B3
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grade had been enforced in May to June, and biodiesel B4 grade had been enforced
after June onwards.
B. Fatty Alcohol
In 2011, the Fatty Alcohol market had performed well comparing to the
year 2010. In the first quarter of 2011, the price of Mid-cut Fatty Alcohol had
continuously increased, with the price at USD3,500 per ton in March, which was the
highest price in the history of such product. Such increase in price was the resulted
of higher demand from the down-stream Fatty Alcohol producer, especially personal
hygienic products and house cleaning products. In addition, the higher feedstock
price was also a factor that contributes to the high price of Fatty Alcohol products.
However, the price of Short-chain and Long-chain Fatty Alcohol did not increase
similar to that of the Mid-cut. As a result, the average 3 cuts Fatty Alcohol prices
were approximately USD2,700 – USD2,800 per ton.
The overall Fatty Alcohol price in second quarter in 2011 for 3 cuts were
at approximately USD2,700 - USD2,800 per ton, which were at the similar level to
that of the first quarter. The Mid-cut was still the most demanded Fatty Alcohol with
the highest price. However, during the second quarter, the price of the Mid-cut Fatty
Alcohol had been reduced following the reduction of feedstock price. As for Short-
chain and Long-chain, the prices were adjusted downward, but at the lower rate than
that of the Mid-cut.
C. Glycerin
During the first quarter of 2011, the Glycerin price had decreased as
compare to that of December 2010 (the month of which the Glycerin’s price was at
the highest level of that year). The average price was at approximately USD832 per
ton, and such price had gradually decreased during the quarter.
During the second quarter of 2011, Glycerin price had significantly
decreased from the first quarter with the average price of USD710 per ton. This was
due to the lower demand from China and the increase in Glycerin supply resulted
from the increase in production of Methyl Ester Palm from Asian producers. Such
increased in supply by Asian producers would be used to fulfill the demand from
users in Europe, where such users mix Methyl Ester Palm Oil with biodiesel to
reduce production cost in the summer. The price of Glycerin is forecasted to be
higher in the latter part of the year, especially after the new Epichlorohydrin (ECH)
plants in Thailand and China, whose main feedstock is Glycerin, will begin their
operations toward the end of this year.
2.6.2 Refining and petroleum products supply sourcing
2.6.2.1 Crude Oil Price
As the global economy continues to expand in 2011, the demand for
crude oil is forecast to grow at an average rate from 1.5 million barrels per day in
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2010 to 89.4 million barrels per day in 2011. Such growth in global demand will be
driven mainly by Asia. On the other hand, demand from countries in Europe and
North America will be at the same level or lower in 2011, even if the economies in
such region are forecasted to grow as these countries used their energy more
efficiently and there are policies that support alternative energies rather than the
usage of crude oil.
Crude oil supply in 2011 will slightly increase from the Non-OPEC
countries, which forecasted to have the production capacity of 53.5 million barrels
per day, an increase from 2010 of 0.7 million barrels per day. Most of the production
capacity from these countries will be from Latin America, North America, Canada
and former Soviet Union countries. On the other hand, the OPEC countries will
produce more Natural Gas Liquid (NGL), due to the increase in production capacity
of such gas, which will resulted in an increase in NGL production to 5.8 barrels per
day in 2011, an increase of 0.5 barrels per day. Such supply is still lower than that
of demand in 2011 by 0.3 barrels.
2.6.2.2 Middle Distillates Products
As the global economy continues to expand in 2011, the industrial
production and international logistics will see a positive growth, which, in turn,
increase the demand for Diesel and Jet Fuel. In 2011, the spread between Diesel
and Jet Fuel as compared to Dubai Crude Oil will be wider than that of 2010, which
was, at that time, at USD14 - USD15 per barrels. Such widen spread is forecasted
to continue its trend throughout 2011 as a result of higher demand for Diesel and
Jet Fuel, while there is limited supply of distillates products entering the market.
2.6.3 Services & Others
2.6.3.1 Competition in Map Ta Phut Industrial Estate
The initial investment is the investment per demand for public facilities.
The Company has received concession in the area near the Company’s plants from
the Department of Public Work and Town & Country Planning, as part of the interior
ministry. The Company has a total of 210 Megawatts of electricity production
capacity to be used for its own production and sell it to other shared facilities.
Subsequently, as the customers of the Company and others operators within the
industrial estate have increased their capacity, there are other electricity producers
beside the Provincial Electricity Authority, such as Glow Energy Plc., whose
concession is outside the Company’s area, in/or nearby such industrial estate. The
Company has regularly expanded its electricity production capacity as well as steam
to fulfill the demand of its customers within their concession area.
For steam, there is a limit on the right of way for piping and loss yield due
to distanced transfer of such steam. As a result, the competition is limited to the
surrounding area only. The Company capacity is at approximately 650 ton per hour.
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Such capacity may differ from the Company’s competitors, but the Company
operates in the petrochemical industry and shared facilities, and, as a result, has in-
depth knowledge of the needs and limitations of the petrochemical production.
Consequently, the Company can provide public facilities services that match the
needs petrochemical business, which help the Company gain a competitive
advantage in its business of selling public facilities within the Company’s concession
estate.
2.7 Environmental Impact
The Company emphasizes the important of following the laws and related policies with
regard to the environment and corporate social responsibility (CSR). The Company has
implemented the Environmental Management System: ISO-14001 firm-wide as the standard of
operating procedures. In addition, the Company has proactively designed the strategies with
regard to the environmental management for companies within the group to follow. Such
companies can use this strategy in their productions and services, thereby systematically and
continuously increase the efficiency in the environmental management, which, in turn, will
resulted in the effective usage of resources, reduction of production cost and the businesses
operations that are friendly to the environment . The Company aims to increase its
environmental standards so that it can grow its business in a sustainable manner, and focuses
on production procedures that have the environmental standards higher than those required by
policies or related laws. In order to reach its goal and minimize any impact to the environment,
the Company uses the Eco-efficiency philosophy to systematically measure the outcome of the
Company’s environmental competence, which can be divided into 5 categories, namely the
usage of water, the usage of energy, the activities that may contribute to global warming,
activities that cause substance that may deplete the ozone and the amount of wastes. As for
the employees, the Company has the policy to emphasize their consciousness in their work to
ensure that their work will have minimum or no impact to the environment.
The Company has set the target to reduce the amount of waste to be secured in the
landfill to 0 for the Company’s petrochemical plants within 2015. The Company will use 3R
philosophy and Innovation Technology that will be suitable for the current business environment.
The Company also conducted a research and development to add value to such waste, thereby
develop the Eco-Industry. In addition, the Company strictly manages its production waste as
required by law and adds certain policies beyond those required by law, such as requiring those
who are responsible for transfer of the dangerous waste to install GPS system on their trucks in
order to prevent such waste to be discarded in an illegal manner. The Company also use
certain waste in other industries. As for the Olefin and shared facilities, the Company has
conducted studies on carbon footprint on the HDPE with the purpose of obtaining carbon
footprint of HDPE, for the HDPE I-1 production unit and will proceed to other products at a later
stage.
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The Company also has a Pollution Prevention policies, such as air quality control for
refinery and aromatics plants within the Map Ta Phut Estate, thereby controlling volatile organic
compounds (VOC) from the storage and transportation tanks. In addition, the Company has kept
records the amount of VOC emission and consistently maintains the equipments to ensure
minimum VOC emitted to the environment. The Company also uses clean fuel in order to
reduce the emission of sulfur dioxide gas, and keeps on improving the system, such as
improving the efficiency of the burning of the electricity generating turbine in order to decrease
the amount of Nitrogen Oxide emission. Moreover, the Company has the environmental
management system that is transparent and auditable by governmental agencies, and the
Company has installed the automatic tools that consistently measure air quality release from the
plants and submits such information to Map Ta Phut Industrial Estate’s Environmental
Monitoring & Control Center 24 hours a day.
Lastly, the Company is fully aware the important of sources of water and its quality in
Rayong. As a result, the Company has installed a system that maximizes and allows waste
water to be reused, and reduced the release of waste water from the plants. Such system will
reuse the water that is being treated in the Company plants’ operations. Moreover, the
Company has the waste water pool, in which the Company must conduct tests on the quality of
such waste water to ensure that they are above the standard as required by law before
releasing it from the plants.
3. Summary of the Essence of the Contracts/Agreements Transferred from PTTAR to the
Company
3.1 Feedstock Agreements
Material feedstock agreements for the production of the aromatics products and
petroleum products are as follows:
Key Feedstock Party Contract Quantity
(Barrels per Annum)
Termination Year
Crude Oil PTT As designated by the
Company
2024*
Condensate PTT 40,000,000 – 51,000,000 2016* Note* The agreement is made on an evergreen basis whereby it will continue to be in effect after the term of such agreement has lapsed,
unless terminated by either party by a prior written notice.
The crude oil agreement will be terminated on 9 February 2024. Under this agreement,
PTT agrees to supply crude oil and other feedstock according to the types and quantities designated
by the Company for the operations of the Company’s refinery. The condensate agreement will be
expired on 31 December 2016. Under this agreement, PTT has an obligation to supply
approximately 40-51 million barrels of condensate per annum.
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3.2 Petroleum Products and Aromatics Products Offtake Agreements
The Company has the offtake agreements which cover all of its petroleum products and
aromatics products. Most of these agreements are long-term agreements made with PTT. The key
terms and conditions of the material products offtake agreements are summarised as follows:
• Offtake Agreement on Petroleum Products
A. Long-term products offtake agreement for petroleum products generated from
AR1 i.e. jet fuel, diesel fuel and fuel oils with PTT, under which PTT is obliged to
purchase petroleum products from AR1 the minimum amount of at least 70 per
cent of the total production amount. The term of the agreement is 18 years
(ending on 9 February 2024), after which the agreement will automatically
continue to be in effect, unless the agreement is terminated by either party by a
prior written notice (on an “Evergreen Basis”).
B. An offtake agreement for petroleum products generated from the New Complex
(New Product Offtake Agreement) with PTT, under which PTT agrees to
purchase 100 per cent of the petroleum products of the Company, which is
produced from the Condensate Residue Splitter (the Upgrading Complex Project
Phase 1). The purchase price for at least 50 per cent of the products shall be the
domestic market price and the remaining shall be sold at the export market price
or at any other price that would be mutually agreed. This agreement has the
same termination period as the products offtake agreement for petroleum
products which is generated from AR1.
C. The light naphtha offtake agreements with 2 domestic customers, SCG
Chemicals and SAKC, with the term of 1 – 4 years.
D. The condensate residue offtake agreement with PTT, with a term of 15 years.
This agreement will expire in January 2012. However, the Company already sent
notice of termination to PTT before the amalgamation.
• Offtake Agreement on Aromatics Products
E. The offtake agreements for most of its aromatics products in the amount of
approximately 70 per cent of total production amount to domestic customers. The
aromatics products produced from AR2 are sold to domestic customers through
PTT under the long-term agreement. In respect of the aromatics products
generated from AR3, PTTAR has directly made long-term offtake agreements
with domestic customers, such as Indorama Petrochem Limited and PPCL.
F. For the offtake agreement for aromatics products which must be exported for
sale, in the amount of approximately 30 per cent of the production amount, the
Company sells these products to PTT under long-term agreements, and directly
supply these products to PTT’s customers.
The essence of the offtake agreements for these two kinds of products are summarised as
follows:
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Product Party Contract Quantity
(Barrels per Annum) Termination Year
Petroleum Product
Petroleum Product
from AR1
PTT
Not less than 70 per cent
of the production amount 2024 *
Petroleum Product from the New
Complex PTT
100 per cent of the
production amount 2024 *
Light Naphtha
SCG
Chemicals 840,000 - 1,080,000 2011 ****
SAKC 63,360 – 79,200 Evergreen **
Condenste Residue PTT 585,000 2012 ***
Aromatics Products
Benzene PTT 120,240 – 353,720 2012 *
PPCL 150,000 - 180,000 2023 *
Paraxylene
PTT 430,000 – 591,000 2012 *
TPT 80,000 – 100,000 2016 *
SMPC 250,000 – 270,000 2012 *
Indorama 190,000 – 200,000 2013 *
Orthoxylene PTT 28,200 – 55,410 Evergreen **
Cyclohexane UCHA 76,000 – 81,000 2011**** Note *The agreement is made that is on an evergreen basis whereby it will continue to be in effect after the term of such agreement
has lapsed, unless terminated by either party by a prior written notice.
**The agreement is on an evergreen period where it will be terminated upon a prior written notice by either party.
***PTTAR has given a notice to PTT for a termination of the offtake agreement for Condensate Residue.
****Negotiation is in progress for extension of term.
3.3 Utilit Agreements
• Tank Farm Storage and Service Agreement
• Material tank farm storage and service agreements with Thai Tank Terminal Co.,
Ltd. for the purposes of storing the aromatics products which will be exported and
the Condensate feedstock obtained from domestic sources. These agreements will
end during a period between 2011 - 2028.
• Supply Agreement for Power, Steam and Water for Industrial Use
• A long-term supply agreement with Glow Energy Plc. for the purchase of power,
steam and water for industrial use with the term of 25 years ending in April 2021.
• Head of Agreement with PTT Utility Co., Ltd. for the supply of power, steam and
water for industrial use with respect to AR3.
• Gas Supply Agreement
• PTTAR has entered into 4 gas supply agreements with PTT to be used as
feedstock /fuel for refinery plant and aromatics plant. The term of each agreement
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is 10 years, whereby PTTAR is entitled to renew each agreement by giving a
notice not less than 6 months prior to termination of such agreement.
3.4 Land Lease Agreements
• The land lease agreement and agreement on the permission for the use of land with the
Industrial Estate Authority of Thailand (IEAT)
A. Land plot No. I-20/2 with the leased area of 156.25 Rai for the term of 30 years
from 18 September 1992 to 17 September 2022
B. Land plot No. I-17/2 with the leased area of 97 Rai 1 Ngan and 60.71 square wah
for the term of 27 years and 10 months from 13 January 1993 to 14 November
2020
C. Land plot Nos. I-14/3 and I-24/4 with the leased area of 248 Rai 3 Ngan and 10.60
square wah for the term of 30 years from 28 March 1991 to 28 March 2021
D. Land plot Nos. I-25/1 and I-25/2 with the leased area of 500 Rai and 26.46 square
wah for the term of 30 years from 10 September 1993 to 9 September 2023
E. Land plot No. I-14/4 with the leased area of 36 Rai 3 Ngan 30.80 square wah for
unlimited term from 22 January 1996
F. Land plot No. G-3 with the leased area of 1 Rai, 3 Ngan and 22.56 square wah for
the term of 3 years from 16 July 2010 to 15 July 2013
G. Land plot No. G-8/1 with the leased area of 1 Rai and 59.14 square wah for the
term of 28 years and 4 months from 20 November 1992 to 28 March 2021
• Lease Agreement and Service Agreement with Energy Complex Co., Ltd.
H. 555/1 Energy Complex Building A Floor 14, Vibhavadi Rangsit Road, Chatuchak
Sub-district, Chatuchak District, Bangkok, for use as head office premises, with the
total office area of 2,735 square meters. The agreement term is from 1 October
2009 to 30 September 2012.
• Lease Agreement and Service Agreement with State Railway of Thailand
I. The land in the Map Ta Phut train station with the leased area of 15,900 Sq.
metres for the term of 3 years from 16 June 2010 to 15 June 2013
• The land lease agreement with RIL Co., Ltd.
J. The land title deed No. 127402 with the leased area of 10 Rai 3 Ngan and 79.5
square wah for the term of 30 years from 14 June 2008 to 26 April 2037
4. Summary of the Essence of the Contracts/Agreements Transferred from PTTCH to the
Company
4.1 Agreements relating to the Olefins-Shared Facilities
• Long-term Olefins Sales Agreement (OSA)
Long-term OSA were made with downstream petrochemical plants. These OSA were
structured on Minimum Contract Quantity, that is, such group of downstream petrochemical plants
must buy products in the minimum quantity specified in the agreement. The Company has an
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obligation to sell 576,700 tons of Ethylene per annum and 198,680 tons of Propylene per annum
under the OSA.
The essence of the agreements are summarised as follows:
Product Party Contract Quantity
(Tons/Year)
Agreement
Expiry Year
Ethylene
TPE 176,000 2016
44,000 2011
TPC 50,700 2016
BPE 176,000 2011
SSMC 61,000 2012
VNT 69,000 2011*
Propylene TPP
95,000 2011
9,180 2016
HMC 94,500 2016 Note *Negotiation is in progress for extension of terms.
• Olefins Sales Agreements other than the OSA
The essence of the agreements are summarised as follows:
Product Party Contract Quantity
(Tons/Year)
Agreement
Expiry Year
Ethylene VNT 69,000 2022
TOCGC 300,000 2021
Propylene PPCL OP,QQQ 2023
Aditya Birla Chemicals
(Thailand) Co., Ltd.
10,000 2014
• Sales Agreements in relation to other By-products from the Manufacture of Olefins
Agreements for the production of commercial quantities of several kinds of by-products
from the manufacture of olefins, viz. mixed C4, pyrolysis gasoline, tail gas, cracker bottom and
hydrogen, through the long-term and short-term agreements referencing to the prices of products in
the Asian markets.
The essence of the agreements are summarised as follows:
Product Party Contract Quantity
(Tons/Year)
Agreement
Expiry Year
Mixed C4 Bangkok Synthetics Co., Ltd. 70,000 2015
Pyrolysis Gasoline PTT 150,000-300,000 2012
Tail Gas TIG Hyco Co., Ltd. 17,520 2012
TOCGC 4,380 2022
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Product Party Contract Quantity
(Tons/Year)
Agreement
Expiry Year
Cracker Bottom Thai Tokai Carbon Products
Co., Ltd.
12,000-30,000 2011*
Hydrogen Thai Oleochemical Co., Ltd. 2,760-3,780 2023 Note * Renewable on a year-by-year basis.
• Agreements for sales of feedstock for the production of olefin products
These are agreements for sales of feedstock, such as ethane, propane, LPG and NGL
with ESSO as contractual party.
The essence of the agreements are summarised as follows:
Product Party Contract Quantity
(Tons/Year)
Agreement
Expiry Year
Ethane PTT 454,000 - 605,000 2004 - 2016
Ethane from the 5th
Gas Separation Plant
PTT 370,000 – 500,000 2005 - 2020
Propane PTT 126,000 - 168,000 2004 - 2016
LPG PTT 100,000 - 160,000 2004 - 2016
LPG PTT > 240,000 2010 - 2011*
LPG from the 5th
Gas Separation Plant
PTT > 156,000 2006 - 2021
LPG PTT 336,000 2010 - 2011*
NGL PTT 380,000 – 470,000 2006 - 2021
LPG ESSO 10,000 – 15,000 2008 - 2011** Note* The agreement is made on an evergreen basis whereby it will continue to be in effect after the term of such agreement has lapsed,
unless terminated by either party by a prior written notice.
** Negotiation is in progress for extension of terms.
4.2 Sales Agreements in Relation to Service Business and Others
• Utilities sales agreements and port and product storage services agreements
A. Utilities Sales Agreement with TPC on 1 January 2007 to supply utilities such as
electricity, steam and industrial water, for a period of 10 years
B. Utilities Sales Agreement with TPE on 1 January 2007, to supply utilities such as
electricity, steam and industrial water, for a period of 10 years
C. Utilities Sales Agreement with HMC on 1 January 2007, to supply utilities such as
electricity, steam and industrial water, for a period of 10 years
D. A Small Power Producer Power Supply Agreement with EGAT under which PTTCH
shall supply 32 MW of electricity for a period of 21 years. The commercial
operation date in the form of a Firm Contract commenced on 1 April 1997
E. A Power Supply Agreement with TPC Paste Resin Co., Ltd. to supply 4 MW of
electricity for a period of 15 years, commencing from March 2003
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F. A Power Supply Agreement with TPC (PVC 9 units) to supply 3 MW of electricity
for a period of five years, with a renewal for another term of five years. The power
supply commenced in January 2007.
G. A Utilities Sales Agreement with BPE on 1 August 2009 to supply utilities such as
electricity and steam for a period of 15 years.
H. A Power Supply Agreement with Thai Styrenics Co., Ltd. to supply 1.8 MW of
electricity for a period of 15 years. The power supply commenced in September
1999.
I. An Additional Power Supply Agreement with Tokuyama Siam Silica Co., Ltd.
(“TSSC”) Plant 2 to supply 1.8 MW of electricity for a period of 15 years,
commencing from October 2006
J. A Power Supply Agreement with Thai Tank Terminal Co., Ltd. (“TTT”) to supply 2.5
MW of electricity for a period of 15 years, commencing from January 2002
K. A Steam Supply Agreement with TSSC to supply steam at an average rate of 4
tons per hour for a period of 15 years. The steam supply commenced in October
2002
L. A Steam Supply Agreement with Solvay Peroxythai Limited to supply steam at an
average rate of 4 tons per hour for a period of five years with a renewal for another
term of five years, commencing from January 2004
M. A Power Supply Agreement with Bangkok Industrial Gas Co., Ltd. to supply 5 MW
of electricity, commencing from August 2009 and will be expire on 31 July 2012.
N. A Power Supply Agreement with HMC (Plant 3) on 1 April 2009 to supply utilities
such as electricity, steam and industrial water for a period of 15 years
O. A new Memorandum of Agreement of Product Loading Services to provide product-
loading services through ports and warehouses with TPC for a term of 10 years,
commencing from June 2005 and expiring in May 2015
P. A Memorandum of Agreement with Apex Petrochemical Co., Ltd. to provide loading
services for the Vinyl Chloride Monomer product. Currently, the guaranteed
minimum quantity is 70,000 tons per year. The agreement term is 15 years,
commencing from 1997 with a renewal for another term of five years
Q. A Memorandum of Agreement with Thai-MC Co., Ltd. in relation to loading services
for methanol. Currently, the guaranteed minimum quantity is 32,000 tons per year.
The agreement term is 15 years, commencing from 5 November 1998 and
renewable for another five years
R. A Product Loading Service Agreement with HMC to provide loading services for the
propylene product. The agreement term is 3 years, commencing from 1 December
2009 with a renewal for another term of three years per each renewal. However,
the total term of the agreement shall not exceed 15 years
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4.3 Agreement related to the Polymer Products Value Center
The Memorandum of Agreement on the sales of products which covers the distribution
and marketing activities with PTTPM. The Company will receive 25 per cent of the shares in
PTTPM. These shares were formerly held by PTTCH as the distributor of all polymer products.
4.4 Lease Agreements
• Land lease agreements with the Industrial Estate Authority of Thailand (IEAT)
A. Land plot with an area of 433 rai, 2 ngan, 50 square wah, for construction of a
factory and carrying out the business of producing ethylene and propylene products
(Factory I-1), having a lease term of 30 years from 5 April 1986 to 4 April 2016,
with a renewal for another term of 20 years
B. Land plot with an area of 8 rai, 1 ngan, 95 square wah, for carrying out the
business of pipe laying for product transportation and utility systems, having a
lease term of 30 years from 9 August 1989 to 8 August 2019, with a renewal for
another term of 20 years
C. Land plot with an area of 312 rai, 1 ngan, 89.23 square wah, for the construction of
a factory and operation of an industrial business which includes the existing factory
and the new production of ethylene (Factory I-4), having a lease term of 30 years
which will expire in November 2020
D. Land plot with an area of 41 rai, 2 ngan, 45.83 square wah, for the operation of an
industrial business, having a lease term of 30 years from 28 June 2002 to 27 June
2032
E. Land plot with an area of 7 rai, 1 ngan, 2.58 square wah, for the production of
Ethylene Glycol, Ethylene Oxide, C9 and Resin, having a lease term of 12 years
from 1 July 2005 to 30 June 2017
F. Agreement on Permission to Use the Land for Carrying Out Other Businesses that
Benefit and Relate to the Business in the Map Ta Phut Industrial Estate (for
product transportation), land plot with an area of 7 rai, 1 ngan, 2.33 square wah,
having a lease term starting from 9 August 1989 to 4 April 2016 for carrying out the
business of pipe laying for product transportation
G. Agreement on Permission to Use the Land for Carrying Out Other Businesses that
Benefit and Relate to the Business in the Map Ta Phut Industrial Estate (for
electricity transportation), land plot with an area of 2 rai, 2 ngan, 95.55 square wah,
having a lease term starting from 23 February 1999 to 4 April 2016 for carrying out
the business of pipe laying for electricity transportation
• Land lease agreements with PTT
H. The land located at Map Ta Phut Subdistrict, Muang District, Rayong Province, with
an area of 75 rai, 3 ngan, 91.1 square wah, in order to construct a jetty and
warehouses for liquid chemical products, having a lease term of 30 years from 20
December 1991 to 19 December 2021, with a renewal for another term of 20 years
• Land lease agreement with Energy Complex Co. Ltd.
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I. The land located at No. 555/1 Energy Complex Building A Floor 15-18, Vibhavadi
Rangsit Road, Chatuchak, Bangkok, as the head office, comprising: office area of
10,460 square meters, corridor area of 480 square meters and storage area of 90
square meters, having lease term from 1 October 2009 to 30 September 2012
• Land lease agreements with BPE, as a subsidiary of the Company
J. Land plot with an area of 84 rai, 1 ngan, 52 square wah, according to the land
lease agreement no. 12/2533-nor.por. for carrying out the business of producing
polyethylene, having a lease term of 30 years (from 9 August 1990 to 8 August
2020)
K. Land plot with an area of 7 rai, 3 ngan, according to the land lease agreement no.
2/2552, in order to build storages, having a lease term of 3 years (from 4 January
2010 to 3 January 2013)
L. Land plot with an area of 1 rai, 95 square wah, according to the land lease
agreement no. nor.por. 003/2552, for parking area, having a lease term of 3 years
(from 1 June 2009 to 31 May 2012)
M. Land plot with an area of 62.5 square wah, according to the land lease agreement
no. 3/2550- nor.por., in order to carry out the business of pipe laying for product
transportation, having a lease term of 26 years (from 8 May 1994 to 8 August
2020)
5. Future Projects
5.1. Clean fuel and Upgrading Complex Phase 2 Project or Deep Hydrodesulfurization
(DHDS) Project is the project that produces 50 ppm ultra-low sulfur diesel (Euro 4 Standard), in
order to comply with the policy to improve fuel quality that will start being enforced throughout the
country on 1 January 2012. The investment of this project will be approximately USD 220 million. As
of 30 June 2011, the overall project has progressed 98.6%.
5.2. Project EPS (Utility project for PTTCH’s internal use): The objective of Project EPS
is to produce steam and electricity for PTTCH’s internal use for its expansion. This project shall
enhance stability and reliability of PTTCH’s utility, resulted in stability of revenue and overall
performance of PTTCH. Investment of the project is approximately USD210 million. The construction
is expected to be completed in July 2011. As of 30 June 2011, the progress of overall construction
is approximately 99.17%.
5.3. Project Bio Spectrum: Project of color extraction from Methyl Ester for production
of food additives is a joint venture project between PTTCH and Inventa Group with the stake in the
joint venture of 75% and 25%, respectively. PTTCH and Inventa Group conducted the joint feasibility
study of color extraction from Methyl Ester for production of food additives. Methyl Ester from TOL
will be sent to Project Bio Spectrum for colors extraction (Carotenoids) and it will be sent back to
TOL for selling accordingly. PTTCH’s investment in this project is approximately USD11.2 million.
Benefits from this project to PTTCH are the value added for its oleochemical business, benefits from
using raw material in the group and project, and brand creation for PTTCH’s products. Currently, the
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the project has completed its Basic Engineering Package and is working on the Detail Engineering
Package (DEP). As for the environmental related work, the project has sent the IEE report, on SPD,
to the IEAT for its consideration.
5.4. Project Butene-1: The objective of Project Butene-1 is to enhance product value
and co-invest to expand business into new markets. PTTCH’s policy is to add value to the entire
product chain. Upon the project completion, capacity of Butene-1 and Butadiene will be 100,000 tons
per year in aggregate and total investment is approximately THB 6,100 million. Construction is
expected to complete in second quarter of 2014.
In addition to projects of each company mentioned above, the Comapny may undertake
additional projects as appropriate depending on business opportunities that may arise. If that is the
case, the company will disclose information as appropriate in accordance with relevant laws and
regulations.
6. Technical and Management Assistance
- None -
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7. Connected Transactions
Connected Transactions between The Company and related companies for the six- month
ended 30 June 2011 are presented according to the unaudited pro forma consolidated financial
information (“Pro forma financial statements”) for the six-month ended 30 June 2011, which is issued
for presenting the financial position and the results of operations from the business combination
under amalgamation of PTTCH and PTTAR on 1 January 2010
Company Name Relationship Connected Transaction For the Six-Month
Ended
30 June 2011
(Million Thai Baht)
1. PTT Plc. The Company’s Major
shareholder, share
some common
executives and
directors
Income statement transaction
Sales of goods or
rendering of services
111,585
Purchases of goods or
receiving of services
172,071
Other income 48
Other expense 74
Loss on difference of crack
spread swap and crude oil
spread swap agreements
1,107
Finance cost 177
Balance sheet transaction
Trade accounts receivable
– related parties
14,077
Trade accounts payable –
related parties
21,229
2. PTT Polymer
Marketing Co.,
Ltd.
Associated company,
the Company hold
25% shares, common
major shareholders,
share some common
directors
Income statement transaction
Sales of goods or
rendering of services
28,777
Other income 3
Other expense 3
Balance sheet transaction
Trade accounts receivable
– related parties
4,467
3. Vinythai Plc. Associated company, Income statement transaction
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Company Name Relationship Connected Transaction For the Six-Month
Ended
30 June 2011
(Million Thai Baht)
the Company hold
24.98% shares, share
some common
directors
Sales of goods or
rendering of services
3,077
Purchases of goods or
receiving of services
18
Other income 2
Dividend income 207
Balance sheet transaction
Trade accounts receivable
– related parties
577
4. PTT ICT Solution
Co., Ltd.
Associated company,
the Company hold
40% shares, and The
company’s executives
are directors
Income statement transaction
Purchases of goods or
receiving of services
1
Other income 19
Other expense 95
5. Star Petroleum
Refining Co., Ltd.
Common major
shareholders, share
some common
directors
Income statement transaction
Sales of goods or
rendering of services
3,871
Purchases of goods or
receiving of services
4,738
Other income 5
Other expense 9
Balance sheet transaction
Trade accounts receivable
– related parties
517
Trade accounts payable –
related parties
1,100
6. PTTEP Siam Ltd. Subsidiary of related
company which has
common major
shareholder
Income statement transaction
Sales of goods or
rendering of services
30
Balance sheet transaction
Trade accounts receivable
– related parties
6
7. PTT Exploration Common major Income statement transaction
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Company Name Relationship Connected Transaction For the Six-Month
Ended
30 June 2011
(Million Thai Baht)
and Production
Plc.
shareholder and share
some common
directors
Sales of goods or
rendering of services
9
Balance sheet transaction
Trade accounts receivable
– related parties
3
8. PTT Asahi
Chemical Co.,
Ltd.
Common major
shareholder
Income statement transaction
Sales of goods or
rendering of services
180
Other income 2
Balance sheet transaction
Trade accounts receivable
– related parties
64
9. IRPC Plc. Common major
shareholder and share
some common
directors
Income statement transaction
Sales of goods or
rendering of services
2,593
Purchases of goods or
receiving of services
597
Other income 6
Balance sheet transaction
Trade accounts receivable
– related parties
2
Trade accounts payable –
related parties
68
10. HMC Polymers
Co., Ltd.
The Company’s
shareholder
Income statement transaction
Sales of goods or
rendering of services
2,454
Purchases of goods or
receiving of services
130
Balance sheet transaction
Trade accounts receivable
– related parties
557
Trade accounts payable –
related parties
33
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Company Name Relationship Connected Transaction For the Six-Month
Ended
30 June 2011
(Million Thai Baht)
11. Bangchak
Petroleum Plc.
Common major
shareholder and share
some common
directors
Income statement transaction
Purchases of goods or
receiving of services
6
Balance sheet transaction
Trade accounts payable –
related parties
1
12. Thai Industrial
Gas Plc.
Share some common
directors
Income statement transaction
Sales of goods or
rendering of services
2
Purchases of goods or
receiving of services
43
Other expense 1
Balance sheet transaction
Trade accounts payable –
related parties
2
13. PTT International
Trading Pte. Ltd.
Common major
shareholder
Income statement transaction
Sales of goods or
rendering of services
761
Purchases of goods or
receiving of services
424
Other income 8
Balance sheet transaction
Trade accounts receivable
– related parties
127
Trade accounts payable –
related parties
64
14. Dhipaya
Insurance Plc.
Common major
shareholder and share
some common director
Income statement transaction
Purchases of goods or
receiving of services
160
Other income 523
Other expense 52
15. Energy Complex
Co., Ltd.
Common major
shareholder
Income statement transaction
Other expense 29
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Company Name Relationship Connected Transaction For the Six-Month
Ended
30 June 2011
(Million Thai Baht)
16. Thai Oil Plc. Common major
shareholder and share
some common
directors
Income statement transaction
Sales of goods or
rendering of services
1,519
Purchases of goods or
receiving of services
372
Balance sheet transaction
Trade accounts receivable
– related parties
226
Trade accounts payable –
related parties
193
17. Business
Services Alliance
Co., Ltd.
Common major
shareholder
Income statement transaction
Purchases of goods or
receiving of services
97
Other expense 27
18. PTT Polymer
Logistic Co., Ltd.
Common major
shareholder
Income statement transaction
Sales of goods or
rendering of services
18
Purchases of goods or
receiving of services
348
Other expense 98
Balance sheet transaction
Trade accounts receivable
– related parties
3
19. Others Income statement transaction
Sales of goods or
rendering of services
130
Purchases of goods or
receiving of services
12
Other income 1
Justification and Rationale for Connected Transaction
Sales of products by The Company to connected parties have been carried out mainly for
such connected parties to convert the Company’s products to their own products for their own sales.
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The selling prices should be corresponding to the formula as specified in the long-term off-take
agreements or at the spot prices, as the case may be. Prices must be proven reasonable to both
parties and based on market prices without any undue transfer of interests. When providing services
to connected parties, such transactions should be for transportation or product storage costs of such
related parties. The charge for services should be market-based and benefit both parties without any
transfer of interests.
Transactions involving purchases products, feedstock and/or services from related parties
are being conducted as per normal business practice. The volume of products or feedstock that the
Company purchases, or the services that the Company receives from related parties are for the
need of the Company business’s operations. The purchase price for products or services from the
related parties are according to terms of the contracts, which benefit the Company and such related
parties and without any transfer of interest or with any special arrangements. In addition, the
Company needs to purchase its feedstock from related parties as such related parties have the
production capacity to feed its products to the Company and such feedstock has the specifications
as demanded by the Company’s plants. The Company also benefits from lower transportation cost
since it is able to transfer such feedstock from related parties through its internal secured piping
systems. This is because some related parties have their plants, which produced the Company’s
feedstock, located near Map Ta Phut, Rayong.
8. Debts and Financial Obligations
8.1. Long-Term Credit Facilities Agreements Assumed from PTTAR
Agreement Summary of Terms and Conditions
1 USD 300,000,000 Credit Facilities
Agreement dated 20 December
2005 between syndicated
financial institutions and PTTAR
1. The lender shall provide the following credit facilities:
• Tranche A : a USD term loan in aggregate amount of
USD 100,000,000
• Tranche B : a USD revolving long-term loan in
aggregate amount of USD 200,000,000
2. Term of Repayment :
• Tranche A : to be repaid in 12 installments within 7
years from the date of this agreement.
• Tranche B : to be repaid on the last day of the tenor
under the relevant promissory notes but shall not
exceed 5 years from the first availability date
3. Interest rate : LIBOR plus applicable margin
2 THB 13,200,000,000 Syndicated
Loan Agreement dated 20
December 2005 between
syndicated domestic financial
1. The lender shall provide 4 credit facilities which as of 30
June 2011, the following 2 facilities remain outstanding :
• Tranche D : a THB revolving long-term loan in
aggregate amount of THB 4,800,000,000
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Agreement Summary of Terms and Conditions
institutions and PTTAR • Tranche E : a THB short-term loan in aggregate
amount of THB 2,200,000,000
2. Term of Repayment :
• Tranche D and Tranche E : to be repaid on the last
day of the tenor under the relevant promissory notes
but shall not exceed 7 years from the first availability
date
3. Interest Rate :
• Tranche D : Fixed deposit rate plus applicable margin
• Tranche E : MMR
3 THB 6,000,000,000 Credit
Facilities Agreement dated 26
May 2008 between a domestic
financial institution and PTTAR
1. The lender shall provide the following 2 credit facilities :
• Facility 1 : THB long-term loan in the amount of THB
2,000,000,000
• Facility 2 : THB Revolving long-term loan in the amount
of THB 4,000,000,000
2. Term of repayment :
• Facility 1 : to be repaid in full within 9 years from the
date of the agreement
• Facility 2 : to be repaid on the last day of the tenor
under the relevant promissory notes but shall not
exceed 9 years from the date of the agreement
3. Interest rate : Fixed deposit rate plus applicable margin
4 THB 2,500,000,000 Credit Facility
Agreement dated 22 July 2008
between a domestic financial
institution and PTTAR
1. The lender shall provide a THB long-term credit facility in
the amount of THB 2,500,000,000
2. Term of repayment :
• to be repaid in 3 installments within 10 years from the
date of the agreement
3. Interest rate : THBFIX plus applicable margin
5 THB 2,000,000,000 Credit Facility
Agreement dated 22 August 2008
between a domestic financial
institution and PTTAR
1. The lender shall provide a THB revolving long-term credit
facility in the amount of THB 2,000,000,000
2. Term of repayment :
• to be repaid on the last day of the tenor under the
relevant promissory notes but shall not exceed 10
years from the date of the agreement
3. Interest rate : THBFIX plus applicable margin
6 THB 3,000,000,000 Credit Facility
Agreement dated 17 November
1. The lender shall provide a THB long-term credit facility in
the amount of THB 3,000,000,000
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Agreement Summary of Terms and Conditions
2009 between a domestic
financial institution and PTTAR
2. Term of repayment :
• to be repaid in full within 8 years from the first
availability date
3. Interest rate : Prime rate minus applicable margin
7 THB 6,000,000,000 Credit
Facilities Agreement dated 22
January 2010 between a
domestic financial institution and
PTTAR
1. The lender shall provide 2 long-term credit facilities in an
aggregate amount of THB 6,000,000,000 :
• A long-term loan facility and revolving long-term loan
facility in the amount of THB 3,000,000,000 which the
revolving long-term loan facility shall be transferred to
long-term loan facility on the 5th anniversary of the
date of the agreement
• A short-term loan facility in the amount of THB
3,000,000,000
2. Term of repayment :
• Long-term loan facility : to be repaid in 10 installments
within 10 years from the date of the agreement
• Short-term loan facility : to be repaid on the last day
of the tenor under the relevant promissory notes but
shall not exceed 5 years from the date of the
agreement
3. Interest rate :
• Long-term loan facility : Fixed Deposit Rate plus
applicable margin
• Short-term loan facility : MMR
8 THB 400,000,000 Credit Facility
Agreement dated 2 July 2010
between a foreign financial
institution and PTTAR
1. The lender shall provide a revolving long-term loan facility
in the amount of THB 400,000,000
2. Term of repayment :
• to be repaid on the last day of the tenor under the
relevant promissory notes but shall not exceed 3 years
from the date on which PTTAR accepted the Offer
Letter of the lender
3. Interest rate : LIBOR plus applicable margin or MMR
9 THB 2,000,000,000 Credit Facility
Agreement dated 13 September
2010 between a domestic
financial institution and PTTAR
1. The lender shall provide a revolving long-term loan facility
in the amount of THB 2,000,000,000
2. Term of repayment :
• to be repaid on the last day of the tenor under the
relevant promissory notes but shall not exceed 30
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Agreement Summary of Terms and Conditions
September 2018
3. Interest rate : THBFIX plus applicable margin
10 USD 200,000,000 Credit Facilities
Agreement dated 13 September
2010 between syndicated lenders
and PTTAR
1. The lenders shall provide the following 2 loan facilities:
• Tranche A : a long-term loan facility in the amount of
USD 80,000,000
• Tranche B : a revolving long-term loan facility in the
amount of USD 120,000,000
2. Term of repayment :
• Tranche A : to be repaid in full within 5 years from the
date of the agreement
• Tranche B : to be repaid on the last day of the tenor
under the relevant promissory notes but shall not
exceed 5 years from the date of the agreement
3. Interest rate : LIBOR plus applicable margin
11 THB 3,000,000,000 Credit Facility
Agreement dated 14 September
2010 between a domestic
financial institution and PTTAR
1. The lender shall provide a revolving long-term loan facility
in the amount of THB 3,000,000,000
2. Term of repayment :
• to be repaid on the last day of the tenor under the
relevant promissory notes but shall not exceed 8
years from the date of the agreement
3. Interest rate : THBFIX plus applicable margin
12 THB 7,000,000,000 Credit
Facilities Agreement dated 14
September 2010 between a
domestic financial institution and
PTTAR
1. The lender shall provide the following loan facilities :
• Facility 1 : THB 3,500,000,000
• Facility 2 : THB 3,500,000,000
2. Term of repayment :
• to be repaid in 15 installments within 10 years from the
date of the agreement
3. Interest rate : Fixed Deposit Rate plus applicable margin
13 THB 9,897,500,000 Credit
Facilities Agreement dated 22
September 2010 between
syndicated lenders and PTTAR
1. The lender shall provide the following loan facilities:
• Facility I : a long-term loan facility in the amount of
THB 9,897,500,000
• Facility II : a revolving long-term loan facility in the
amount of THB 3,959,000,000 (the facility amount on
the date of the agreement shall equal to zero and shall
gradually increase upon the repayment of Facility I)
2. Term of repayment :
• Facility I : to be repaid in 20 installments within 10
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40
Agreement Summary of Terms and Conditions
years from the date of the agreement
• Facility II : to be repaid on the last day of the tenor
under the relevant promissory notes but shall not
exceed 10 years from the date of the agreement
3. Interest rate : Fixed Deposit Rate plus applicable margin
14 USD 100,000,000 Credit Facility
Agreement dated 3 November
2010 between a domestic
financial institution and PTTAR
1. The lender shall provide a revolving long-term loan facility
in the amount of USD 100,000,000 (or a THB equivalent)
2. Term of repayment :
• to be repaid on the last day of the tenor under the
relevant promissory notes but shall not exceed 7
years from the date on which PTTAR accepted the
Offer Letter of the lender
3. Interest rate : THBFIX or LIBOR plus applicable margin
15 THB 4,000,000,000 Credit Facility
Agreement dated 28 December
2010 between a domestic
financial institution and PTTAR
1. The lender shall provide a revolving long-term loan facility
in the amount of THB 4,000,000,000
2. Term of repayment :
• to be repaid on the last day of the tenor under the
relevant promissory notes but shall not exceed 7
years from the date of the agreement
3. Interest rate : Fixed Deposit Rate plus applicable margin
16 Shareholder Loan Agreement 1. Shareholder shall provide a long-term loan facility in the
amount of THB 5,050,053,041.29
2. Term of repayment :
• One bullet repayment within 30 days from the maturity
date of the USD Notes
3. Interest rate : MLR
8.2. Working Capital Credit Facilities Agreements Assumed from PTTAR
Agreement Summary of Terms and Conditions
1 THB 1,800,000,000 Short-Term
Credit Facility Agreement dated 2
March 2009 between a domestic
financial institution and PTTAR
1. The lender shall provide a short-term loan facility in the
amount of THB 1,800,000,000 to be repaid in full within 3
years from the date of the agreement
2. Interest rate : MMR
2 THB 1,000,000,000 Short-Term
Credit Facility Agreement dated
16 December 2008 between a
domestic financial institution and
1. The lender shall provide a short-term loan facility in the
amount of THB 1,000,000,000 which shall be repaid on
the last day of the tenor under the relevant promissory
notes issued by the borrower to the lender
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Agreement Summary of Terms and Conditions
PTTAR 2. Interest rate : MMR
3 THB 600,000,000 Short-Term
Credit Facility Agreement dated
17 December 2008 between a
domestic financial institution and
PTTAR
1. The lender shall provide a short-term loan facility in the
amount of THB 600,000,000 which shall be repaid on the
last day of the tenor under the relevant promissory notes
issued by the borrower to the lender
2. Interest rate : MMR
4 THB 1,000,000,000 Short-Term
Credit Facility Agreement dated
30 April 2008 (as amended on 11
June 2008) between a domestic
financial institution and PTTAR
1. The lender shall provide a short-term loan facility in the
amount of THB 1,000,000,000 which shall be repaid on
the last day of the tenor under the relevant promissory
notes issued by the borrower to the lender
2. Interest rate : MMR
5 EUR 40,000,000 Short-Term
Credit Facility Agreement dated 7
October 2008 (as amended on 10
September 2010) between a
foreign financial institution and
PTTAR
1. The lender shall provide a short-term loan facility (EUR
40,000,000) and a guarantee facility (EUR 10,000,000) in
an aggregate amount of EUR 40,000,000
2. Interest Rate and Fee :
• Short-term loan : MMR
• Letter of guarantee : guarantee fee as quoted by the
lender
6 THB 1,200,000,000 Short-Term
Credit Facility and USD
30,000,000 Foreign Exchange
Facility Agreement dated 24
January 2011 between a foreign
financial institution and PTTAR
1. The lender shall provide a short-term loan facility in the
amount of THB 1,200,000,000 and a foreign exchange
facility in the amount of USD 30,000,000
2. Interest rate and fee :
• Short-term loan : MMR
• Foreign exchange facility : Foreign exchange fee as
quoted by the lender
7 THB 3,000,000,000 Short-Term
Credit Facility Agreement dated 4
February 2010 between a
domestic financial institution and
PTTAR
1. The lender shall provide a short-term loan facility in the
amount of THB 3,000,000,000 which shall be repaid within
90 days from the date of the relevant promissory notes.
2. Interest rate : MMR
8 USD 30,000,000 Short-Term
Credit Facility Agreement dated
24 February 2011 between a
foreign financial institution and
PTTAR
1. The lender shall provide a short-term loan facility in the
amount of USD 30,000,000 or an equivalent amount which
shall be repaid within 180 days from the date of the
relevant promissory notes
2. Interest rate : MMR
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8.3. Debentures Assumed from PTTAR
Agreement Summary of Terms and Conditions
1 Unsecured debenture of PTTAR
no. 1/2009 due 2014
1. The debenture was issued on 30 April 2009 comprising
15,000,000 units at THB 1,000 each in the total amount of
THB 15,000,000,000 for the tenor of 5 years maturing on
30 April 2014
2. Coupon rate : 5.5% per annum, payable quarterly on 30
January, 30 April, 30 July and 30 October each year
during the term of the debentures
3. The outstanding balance as shown in the latest financial
statements of PTTAR as of 30 June 2011 was THB
15,000,000,000
2 USD 300,000,000 seven-year
unsubordinated and unsecured
debentures (“USD Notes”)
1. USD Notes were issued on 20 July 2005 in the amount of
USD 300,000,000 with the tenor of 7 years maturing on 20
July 2012
2. Interest Rate : 5.5% per annum, payable semi-annually
with first interest payment on 20 January 2006
3. The outstanding balance as shown in the latest financial
statements of PTTAR as of 30 June 2011 was THB 7,252
million
8.4. Long-Term Credit Facilities Agreements Assumed from PTTCH
Agreement Summary of Terms and Conditions
1 THB 9,000,000,000 Credit
Facilities Agreement dated 30
September 2010 between
domestic financial institution and
PTTCH
1. Lender shall provide 2 credit facilities as follows:
• Facility 1 : long-term loan facility in the amount of
THB 3,000,000,000
• Facility 2 : long-term loan facility in the amount of
THB 6,000,000,000
2. Term of repayment :
• Facility 1 : To be repaid in 14 equal semi-annual
installments from the date falling 42 months from the
date of the agreement
• Facility 2 : To be repaid in 10 equal semi-annual
installments from the date falling 66 months from the
date of the agreement
3. Interest rate : Fixed Deposit Rate plus applicable margin
2 THB 1,600,000,000 Credit Facility
Agreement dated 30 September
1. Lender shall provide a loan facility in the amount of THB
1,600,000,000
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43
Agreement Summary of Terms and Conditions
2009 between domestic financial
institution and PTTCH
2. Term of repayment :
• To be repaid in 8 equal semi-annual installments
from the date falling 42 months from the date of this
agreement but shall not exceed 7 years from the
date of the agreement
3. Interest rate : THBFIX plus applicable margin
3 THB 3,000,000,000 Credit Facility
Agreement dated 30 September
2010 between domestic financial
institution and PTTCH
1. Lender shall provide a credit facility in the amount of THB
3,000,000,000
2. Term of repayment :
• To be repaid in full in one lump sum within 30 June
2020
3. Interest rate : THBFIX plus applicable margin
4 THB 2,000,000,000 Credit Facility
Agreement Dated 30 September
2010 between domestic financial
institution and PTTCH
1. Lender shall provide a revolving long-term loan in the
amount of THB 2,000,000,000
2. Term of repayment :
• To be repaid in 2 equal installments on 28
September 2018 and on 30 September 2020
3. Interest rate : Fixed Deposit Rate plus applicable margin
5 USD 100,000,000 Credit Facility
Agreement dated 20 September
2010 between domestic financial
institution and PTTCH
1. Lender shall provide a term loan facility in the amount of
USD 100,000,000
2. Term of repayment :
• To be repaid in 10 equal semi-annual installments
from the date falling 66th month from the date of the
agreement but shall not exceed 21 September 2020
3. Interest rate : LIBOR plus applicable margin
6 THB 3,000,000,000 Credit Facility
Agreement dated 9 September
2005 between domestic financial
institution and Thai Olefins Plc.
as Borrower
1. Lender shall provide a term loan facility in the amount of
THB 3,000,000,000
2. Term of repayment :
• To be repaid in 11 equal semi-annual installments
from the date falling 24 months from the date of the
agreement
3. Interest rate : Fixed Deposit Rate plus applicable margin
7 THB 1,500,000,000 Credit Facility
Agreement dated 25 September
2008 between foreign financial
institution and PTTCH
1. Lender shall provide a term loan facility in the amount of
THB 1,500,000,000
2. Term of repayment :
• To be repaid in 9 equal semi-annual installments
from the date falling 36 months from the date of the
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Agreement Summary of Terms and Conditions
agreement
3. Interest rate : Fixed interest rate
8 THB 1,000,000,000 Credit Facility
Agreement dated 26 August 2008
between foreign financial
institution and PTTCH
1. Lender shall provide a term loan facility in the amount of
THB 1,000,000,000
2. Term of repayment :
• To be repaid in 9 equal semi-annual installments with
first installment on 1 October 2011
3. Interest rate : THBFIX plus applicable margin
9 THB 7,500,000,000 Credit Facility
Agreement dated 28 August 2008
between domestic financial
institution and PTTCH
1. Lender shall provide a term loan facility in the amount of
THB 7,500,000,000
2. Term of repayment :
• To be repaid in 15 equal semi-annual installments
with first installment on 29 August 2011
3. Interest rate : Fixed Deposit Rate plus applicable margin
8.5. Working Capital Credit Facilities Agreements Assumed from PTTCH
Agreement Summary of Terms and Conditions
1. THB 4,200,000,000 Revolving
Credit Facility Agreement dated
22 September 2009 between
domestic financial institution and
PTTCH
1. Lender shall provide a revolving credit facility in the
amount of THB 4,200,000,000 with the term of repayment
to be mutually agreed between the parties provided that
the loan shall be repaid in full within 5 years from the
date of the agreement
2. Interest Rate : Fixed Deposit Rate plus for applicable
margin
2. Credit Facilities Agreement dated
28 November 2007 between
foreign financial institution and
PTTCH
1. Lender shall provide credit facilities comprising