China Development Bank contributes to $250 million syndicated loan for Extension of Petroleum Pipeline System in Northeastern Project

Project narrative

On September 21, 2020, the Guangdong Branch of China Development Bank (CDB) and Bangkok Bank Public Company Limited (BBL) signed a set of $250 million syndicated dual-currency facility (loan) agreements worth (THB 7.8 billion) with Thai Pipeline Network Company Limited (TPN or 泰国管网有限公司) — a special purpose vehicle and joint venture of Electricity Generating Public Company Limited (44.59% ownership stake) and Biggas Technology Co., Ltd. (55.41% ownership stake) — for the Extension of Petroleum Pipeline System in Northeastern Project. The USD-denominated CDB loan carried a 14-year maturity and an unknown interest rate. The borrower is expected to use the loan proceeds to finance a $285 million commercial contract between China Petroleum Pipeline Bureau (Thailand) Co., Ltd. — a subsidiary of China Petroleum Pipeline Engineering Co. Ltd. (CPP) — and Thai Pipeline Network Company Limited (TPN), which was signed on February 27, 2019. The project involves the construction of a 342.8-kilometer underground fuel oil pipeline extension with an annual transport capacity of approximately 5,443 million liters, connecting the Thai Petroleum Pipeline Co., Ltd Terminal in Saraburi to TPN’s owned terminal with storage capacity of 142 million liters in Khon Kaen. The pipeline crosses 5 provinces from Saraburi Province to Khon Khaen Province and associated storage facilities in Khon Kaen Province. Upon completion, the project is expected to serve the northeastern Thai market in a more cost-effective and environmentally-friendly manner compared to the current trucking and railway transportation of petroleum to the region. CPP is the contractor responsible for project implementation. Project implementation commenced in February 2020. As of the end of 2020, the project had achieved a 59.64% completion rate (against a target rate of 64.61%). As of the end of 2021, the project had achieved a 96.32% completion rate (against a target rate of 98.76%). The project’s originally scheduled completion date was January 2022. The project ultimately secured a completion certifcate from Thai Pipeline Network Company Limited on May 31, 2022.