More than 30 million barrels of petroleum products worth about 36.83 billion baht ($0.94bn) have been traded as Thailand debuted its regional energy trading hub at depots in Si Racha and Ko Sichang in Chon Buri.

Prasert Bunsumpun, executive president of PTT Plc, said PTT signed six contracts to sell and three contracts to buy petroleum products with Thai and foreign trading firms.
They are Adnoc and Enoc-PTT of United Arab Emirates, Petronas of Malaysia, Military Petroleum of Vietnam, Samsung Corp of South Korea, RCL Feeder of Singapore, Petrobras of Brazil and Siam Petra International of Thailand.
In addition, memoranda of understanding for petroleum blending were signed between PTT and foreign petroleum firms, for deals that will lead to future co-operation to efficiently meet market demand.
The deals mark the opening of the energy trading centre, to be presided over by Prime Minister Thaksin Shinawatra.
The centre is part of a strategy to develop Thailand as alternative site for petroleum trading in addition to the existing hub in Singapore, said Energy Minister Prommin Lertsuridej.
More than 200 traders who see Thailand’s potential accepted invitations to join the opening ceremony. They represented 118 corporations in 20 countries such as Japan, China, South Korea and countries in the Middle East.
Mr Prasert said the centre expects to boost overall petroleum trading in Thailand to between 800,000 and one million barrels per day over the next few years from 600,000 barrels currently.
Dr Prommin said oil depots in Si Racha and Ko Sichang had been designated as excise and customs tax free zones to promote oil trading there.
In the zone, oil receiving points, tank farms and oil pipelines are available while a one-stop service centre for licensing oil trading had already set up to promote the oil trading.
Regulations for oil-trading companies have also been revised. For example, the requirement for them to build oil storage tanks for legal oil reserves was waived. Corporate entities, both Thai and foreign, could also be registered with two million baht ($51,000), from 50 million baht ( $1.2m) required earlier. The condition that they must have working capital of at least one million baht was also no longer compulsory.
As well, laws and regulations imposed by the Excise, Customs, Energy Business and Marine Transport departments will be soon revamped to support the free zone.
Dr Prommin said the Revenue Department would be asked to consider reducing the corporate income tax for oil trading firms to 10 per cent from the existing 30 per cent.
“We are quite confident that guidelines to develop Si Racha and Ko Sichang are on the right track and will enable us to] successfully compete with the existing hub in Singapore,” said Dr Prommin.
Thailand also hosted the seventh Energy Expert Meeting in Bangkok, he said, adding that although Thailand was not a member of the organisation, it saw the potential of the country’s outstanding role in energy development.
Thailand does not see its plan to become a regional oil trading center as rivaling Singapore, Prime Minister Thaksin Shinawatra added on the sidelines of the inaugural ceremony.
“The key word here is ‘complementary’,” he said. A senior official with state-owned PTT Public Ltd Co, said he did not see Thailand taking away business from Singapore.
“There is enough demand in this market for both trading center to co-exist,” he said. “In fact, Singapore can use Thailand’s infrastructure to add value to its own business,” he said. Thailand in August 2003 launched its initiative to become a regional oil trading hub.
As part of this initiative, the country plans to build a strategic energy land bridge in the south, which would offer traders an alternative, shorter shipping route to the congested Malacca straits and result in cost savings of around 40 cts/bbl.
The Sri Racha oil terminal and Si Chang oil terminal have storage capacity of 730m liters and 340m liters respectively; jetties able to accommodate vessels up to 100,000-250,000 DWT; 385,000 bpd refining capacity and an oil pipeline from Sri Racha to oil terminals in the north of Bangkok.
Meanwhile, the PTT official said he expected the development of Thailand as an oil trading hub as having a positive (downward) impact on prices.
 “Asia has a pay a higher price for its crude compared with Europe and North America. This is because we can only look to one market the Middle East,” he said. “Hopefully, with the development of another trading center in the region, trading volumes would expand and give this region some bargaining power,” he added. Moreover, construction of more storage facilities would also be beneficial for the region, not only in terms of supply security but also lower prices, he said. “I have noticed there is a correlation between the volume of stored oil a country has and the price it has to pay for oil,” he said.