Thai Petroleum Pipeline Co (Thappline) is considering investing in the petroleum pipeline project worth 10 billion baht in a bid to extend its service to the north and northeast of Bangkok, according to managing director Danai Nanasombat.

The company is now conducting a feasibility study, in collaboration with the Petroleum Institute of Thailand (PTIT), focusing on an appropriate route as well as the location for a depot.

"We also want to revise the investment budget to reflect the decline of construction material costs," he said.

The study should be finished within the end of this year with construction to start early next year.

According to the company's research, petroleum product transport through pipelines helps cut logistics costs compared to using land modes. Land transport consumes 16 times more energy than using a pipeline, while trains consume 1.5 times more than pipelines.

"Also, it would be safer than delivery by truck or train which would benefit to the whole national logistics system," Mr Danai said.

Investing in infrastructure now, he said, was a good idea as the country would be ready to catch up with demand once the economy improves.

Thappline now operates a 360-kilometre network connecting major oil refining plants such as PTT Aromatics and Refining, Chevron, Exxon Mobil and Thai Oil in the Eastern Seaboard area, and linked to Suvarnabhumi and Don Mueang airports. Its network also goes to Saraburi.

Thappline had already earmarked a capital of 600 million baht to expand its oil pump facilities to serve demand for petroleum to be fed through pipelines in the future. The current pump unit is running at nearly 80% of its pressure-feed capacity.

The company's pipeline, however, is running at just 50% of its annual capacity of 26 billion litres of oil.

Thappline is in talks with Fuel Pipeline Transportation Ltd (FPT) to co-develop shared facilities in line with its asset-maximisation plan. FPT provides services in central Bangkok to Bangchak Petroleum's oil depot and the Klong Toey oil depot.

"If the talks are successful, costs of maintenance and operation would be cut down," Mr Danai said.

Last month, Thappline won a syndicated loan worth 7.4 billion baht to enhance its cashflow from Kasikornbank, Bangkok Bank, ACL and Bank of Ayudhya. The company's sales last year rose 7% to 2.54 billion baht, with net profit up 26% to 291 million baht.

Thappline is a joint venture between major oil companies, including PTT with 33.1%, Esso 20%, Shell 14%, Chevron 10%, Thai Oil 9%, and retail players holding the rest.