Thai Oil has announced a termination of EPC contract with its main contractor that has caused the delay in the ongoing Clean Fuel Project, stating that the contractor could not meet obligations in accordance with the EPC contract.
Thai Oil Public Company Limited (SET: TOP) refers to the engineering, procurement and construction contract (EPC) dated 19 October 2018, as amended (the “EPC Contract”) in respect of the Clean Fuel Project (the “CFP Project”) entered into between the company and the Consortium of PSS Netherlands B.V. and an unincorporated joint venture of Samsung E&A (Thailand) Co., Ltd., Petrofac South East Asia Pte. Ltd. and Saipem Singapore Pte. Ltd. (collectively, the “Contractor”).
On 24 April 2025, the company exercised its right to terminate the EPC Contract with immediate effect due to the Contractor’s failure to perform its obligations in accordance with the EPC Contract.
Thai Oil has assured that the termination of the EPC Contract will not impact the completion of the CFP Project. The company already has a plan to complete the CFP Project in place which aims for completion of the CFP Project in the third quarter of 2028 and has engaged a consultant with expertise and experience to enhance efficiency in engineering, procurement, and construction management and to support the company in managing each stage of the project until completion.
The remaining work of the CFP Project will be performed by contractors with proven capabilities and experience in large-scale construction projects to ensure that all remaining work on the CFP Project will be successfully completed in accordance with the company’s plan.
The company remains committed to completing the CFP Project for the benefits of the company and shareholders, while taking into account relevant stakeholders.
On 19 February 2025, Samsung E&A (Thailand) Co., Ltd. and Saipem Singapore Pte. Ltd. (collectively the “Claimants”) initiated arbitration proceedings against the company at the Singapore International Arbitration Centre.
Thai Oil later stated that the company has and will continue to strictly comply with the terms of the EPC Contract, taking into consideration the best interests of the company and the shareholders. The company considers that the Claimants’ claims are without merit and, on 25 March 2025, filed its response to defend such claims and bring counterclaims against the Claimants in the Arbitration.
