Bangkok--Mar 18--Thai Paraxylene Mr. Kasame Chatikavanij, Chairman and Managing Director of Thai Oil Company Limited, on March 17 signed the Credit Facilities Agreement for US$ 165 million in his capacity as Chairman of Thai Paraxylene Company Limited, with The Industrial Finance Corporation of Thailand and Bank of Ayudhya Public Company Limited at a ceremony held in the Ballroom of The Regent Bangkok. During the ceremony, the Construction Contract was also signed with JGC Corporation, and the Contract for Services as the Project Engineer with Foster Wheeler International Corporation. Mr. Kasame said that Thai Oil Company Limited (Thaioil) and MOC Holding (Thailand) Company Limited, an affiliate of Mitsubishi Oil Company of Japan, decided to form Thai Paraxylene Company Limited (TPX). The objective of this joint venture company, in which Thaioil holds 62% of shares and MOC 38%, is to produce paraxylene. it was apparent to both partners that the intermediate and downstream petrochemical industries are rapidly expanding. Consequently, demand for feedstock, paraxylene, is growing at a healthy rate, and is currently being met mainly by imports. Therefore, the time is right to build a paraxylene production facility in Thailand, which will reduce dependency on imports to a certain extent, as well as promote further expansion and development of the intermediate and downstream industries. At the same time, Thaioil is equipped and ready to diversify into petrochemicals. Existing facilities at Thaioil Refinery are capable of producing mixed xylenes from platformate, a major blending component of motor gasoline, to feed the new paraxylene plant. The production of mixed xylenes from platformate will have an added benefit of reducing the current gasoline surplus. The paraxylene plant, which costs 7,000 million baht, will be located adjacent to Thaioil Refinery in Amphur Sriracha, Cholburi. It will have a capacity of 300,000 tonnes per year, and will be Thailand's first paraxylene production facility, with mixed xylenes supplied by Thaioil as its feedstock. The process configuration is based on the well-proven and highly advanced technology of UOP, a world leader in petrochemical and aromatics processing technologies. Construction on the plant is scheduled to start in May this year and will be completed in 1999. The new facility will produce quality paraxylene as feedstock for PTA (or pure terephthalic acid) plants, which in turn is feedstock for the production of polyester fibers and PET (or polyethylene terephthalate) bottles. By-products of the paraxylene plant are toluene, heavy aromatics and fuel gas. Mr. Kasame went on to say that TPX has received favourable credit terms, such as the US dollar loan for a tenor up to 17 years from IFCT and Bank of Ayudhya, for two main reasons. Firstly, the lenders have confidence in the two shareholders, Thaioil and MOC Holding (Thailand) Co., Ltd., an affiliate of Mitsubishi Oil Company, a major player in Japan's petroleum and petrochemical industries. Also, Thaioil and Mitsubishi Oil have signed the Terms and conditions of Sponsor's Commercial Support, under which Thaioil undertakes to supply feedstock to, and MOC undertakes to offtake unlifted products from the new plant. This has strengthened the project and added to its creditability. Moreover, added Mr.Kasame, Thaioil's venture into petrochemicals has been well-planned and well-timed in light of the ever-increasing demand for paraxylene. With a sound business base which complements the operation, the project, therefore, benefits both the company and the domestic petrochemical industry. End.