IEAT Reveals "ExxonMobil" Requests to Delay Petrochemical Investment in EEC Due to COVID Impact; "Somjin" Moves Forward to Expand Laem Chabang Industrial Estate, Confirms No Land Reclamation, Plans to Adjust Two Land Areas for Future Industries

Previously, it was estimated that global demand for petrochemicals would grow by 40% from 2016 to 2040, with most of the increased demand occurring in the Asia region, while the COVID-19 pandemic is currently impacting investments.

Ms. Somjin Piluek, Governor of the Industrial Estate Authority of Thailand (IEAT) disclosed the progress of the large-scale petrochemical plant investment project by ExxonMobil, valued at approximately 300 billion baht, in Laem Chabang, Chonburi, which is located in the Eastern Economic Corridor (EEC). Recently, ExxonMobil has requested to postpone the project due to the COVID-19 situation and the global economic slowdown.

IEAT continues to study the expansion of areas to accommodate ExxonMobil's future investment projects and target industries under the Future Industrial Economic Zone Development Project. According to a suitability study by the Petroleum Institute, four areas have been identified:

Area 1 is the most suitable land area, approximately 1,200 rai, which is leased from the Port Authority of Thailand (PAT). Currently, there are seven tenants occupying 14 plots for use as warehouses, car and truck parking for exports, and shipbuilding, with lease contracts ranging from 1 to 15 years, requiring negotiations with the current tenants for suitable solutions.

Area 2 consists of community and commercial areas surrounding the oil refinery, comprising scattered communities interspersed between the oil refinery and oil and gas storage facilities, covering 5,000 rai, of which approximately 1,200 rai is suitable, but negotiations with the community will be necessary.

Area 3 involves land reclamation in the vicinity of Khao Bo Ya and Khao Phu Bai, north of Laem Chabang commercial port, with an initial target area for reclamation of approximately 2,534 rai. Phase 1 includes 2,000 rai, with 1,500 rai leased, and Phase 2 totals 2,534 rai, with 2,250 rai leased.

Area 4 is designated for the construction of a sediment storage site under the expansion project of Laem Chabang deep-sea port Phase 3, covering approximately 1,875 rai, which has already passed the environmental impact assessment (EIA), with about 1,675 rai leased.

Expanding the Industrial Estate Without "Exxon" Interest

“From the study of all four areas, it was found that the most suitable areas for future investment will be the land areas, or Areas 1 and 2, as land reclamation is expected to have a greater environmental impact. Although ExxonMobil has not yet clarified its investment in the petrochemical plant in Laem Chabang Industrial Estate, IEAT will continue to pursue land procurement plans to develop it into an industrial estate that supports the growth of high-tech industries. Suitable areas will be proposed to the IEAT Board for further consideration,” Ms. Somjin stated.

For the land sales or leasing target in the industrial estate for the fiscal year 2020, the original target remains at 3,000 rai. As of the end of June, the total sales or leases reached 1,838 rai, an increase of 1.49% from the same period last year, with two months remaining to achieve the highest possible results, aiming to be close to the set target.

Regarding the establishment of new industrial estates in the EEC, the land use plan and infrastructure development plan for the Eastern Special Development Zone in 2019 clarified the areas for industrial use, leading to a reduction in the number of anticipated industrial estates from 18 to 10. Among these, two developers have already signed agreements to jointly develop industrial estates with IEAT, and it is expected that more will gradually sign contracts with IEAT.

SOURCE: www.bangkokbiznews.com