Samsung E&A is committed to the bond call from Thai Oil Public Company Limited (SET: TOP) at the amount of 88 billion Korean won or approximately 2,102 million baht. The amount has been paid to the bank that issued the bond, according to the corporate filings in DART.
The payment was in accordance with the exercise of rights by Thai Oil to claim performance guarantee, which is about 86% of the total guarantee amount. The Board of Directors of Samsung E&A resolved on January 16, 2025, to pay the amount to Thai Oil.
The disclosure also indicated that there are 57.6 billion won (approx. 1,363 million baht) in payment to Thai subsidiaries, which does not specify that these subsidiaries are related to Thai Oil. Overall, the total payment amount is 146.4 billion won, which has been reflected in its 4Q24 financial results.
However, the filing noted that Samsung is currently in negotiations regarding the exercise of this contract performance guarantee claim and plan to initiate arbitration if necessary. The company stated that it will continue negotiations with the client regarding an increase in the contract amount due to additional costs.
Earlier, Thai Oil had called for a shareholder meeting on 21 February to approve an injection of 63 billion baht to fund the Clean Fuel Project.
The CFP Project investment was approved on August 27, 2018, with an estimated value of USD 4,825 million or THB 160,279 million. Construction completion was initially expected by the first quarter of 2023, with contracts awarded to notable main contractors, comprising Samsung E&A (Thailand) Co., Ltd., Petrofac South East Asia Pte. Ltd. and Saipem Singapore Pte. Ltd. in a joint venture known as UJV.
Thai Oil disclosed in October 2024 that the Consortium provided performance bonds amounting to 10% of the total contract value as security to secure its performance of the EPC contract and as security for potential damages.
Overview of CFP Project
The scope of the CFP Project comprises of the construction of six groups of refining operation units as follows:
Group 1: Hydrocracking Unit (HCU-3) and Residue Hydrocracking Unit (RHCU), which are refining operation units that help adding value to the products by converting fuel oil and bitumen to middle distillate fuels, i.e., jet fuel and diesel.
Group 2: Crude Distillation Unit (CDU-4) to replace CDU-1 & CDU-2 with the refining capacity of 220,000 barrel per day, which distill crude oil, and High Vacuum Unit (HVU), which distill Long Residues oil from the residues of crude oil distillation columns of CDU-4 to be processed to feed to other units for further value adding.
Group 3: Hydrogen Manufacturing Unit (HMU-3 / PSA-4), which produces hydrogen for the use in other distillation units.
Group 4: Hydro Treating Unit (HDT-4) and Hydrodesulfurization Unit (HDS-4), which extracts sulfur from benzyl and diesel oil content, respectively.
Group 5: Sulfur Recovery Unit (SRU), which produces sulfur extracted from various types of oil by the Hydro Treating Unit, before distribution in the form of liquid sulfur or converted into solids for export purposes.
Group 6: Energy Recovery Unit (ERU), which extracts the residual products from converting of heavy oil into jet fuel and diesel from RHCU, referred to as “pitch”, to be used as the fuel for generating electricity which will be used in the production units of the CFP Project.
At present, The Hydrodesulfurization Unit 4 or HDS-4 construction has been successfully completed and commenced test-run for the production of Euro 5 Standard diesel in February 2024.
