Joint venture formed to manufacture sustainable aviation fuel in Thailand

Photo: Bangchak Corporation Public Company Ltd.

Bangchak Corporation Public Company Ltd. announced Sept. 1 that, through a new joint venture called BSGF Company Ltd. involving Bangchak, BBGI Public Company Ltd. and Thanachok Oil Light Company Ltd., it will be the first producer and supplier of sustainable aviation fuel (SAF) from used cooking oil (UCO) in Thailand. A memorandum of understanding on the joint-venture deal was signed at Bangchak’s head office.

In May, Bangchak Group and BBGI signed a memorandum of understanding with Thanachok Oil Light for procurement of UCO as feedstock for the SAF unit to be built at the Bangchak Refinery in Bangkok, Thailand.

With a production unit of an initial daily production capacity of 1 million liters (more than 264,000 gallons per day, or roughly 90 million gallons per year), the joint venture plans to start supplying domestic and international aviation industries by late 2024, helping to reduce approximately 80,000 metric tons carbon-dioxide equivalent of greenhouse-gas emissions from air travel and transport annually.

The investment in the joint venture amounts to between approximately USD$220 million and USD$280 million, according to Bangchak.

Bangchak is contributing 51 percent of the investment while Thanachok Oil Light is providing 29 percent, with BBGI offering the final 20 percent needed.

“This joint venture is the amalgamation of the experience and expertise of the three partners to lay a solid foundation for BSGF in terms of the procurement of raw materials, production, and distribution,” Bangchak stated. “It draws on the strengths of Bangchak as operator of a world-class complex refinery and a pioneer in buying used cooking oil for the production of biodiesel in Thailand, and its expertise in oil trading via BCP Trading Co. Ltd. or BCPT, its affiliate, the largest independent oil trader in the Singapore market; Thanachok Oil Light’s long experience in the procurement of used cooking oil; and BBGI’s leadership in the biofuel industry and producer of high-value biobased products.”

BSGF will begin the construction of the SAF production unit from UCO within Bangchak Refinery, which is expected to be ready for commissioning by the end of 2024.

Tanawat Linjongsubongkot, managing director of Thanachok Oil Light, stated that “Thanachok is confident in this joint venture, recognizing the capability of Bangchak, which prioritizes the enhancing energy security in harmony with the environment and society and complements Thanachok’s corporate mission as an industrial group specializing in the production of biodiesel from used cooking oil, working closely with communities in collection to prevent repeated usage or improper disposal in public waterways.”

Thanachok Group has a UCO collection network covering 77 provinces across Thailand and is able to collect approximated 17 million liters (4.5 million gallons) per month.

Kittiphong Limsuwannarot, president and CEO of BBGI, stated that from its operational biodiesel plant expertise, technology and feedstock, BBGI is able to sufficiently provide raw materials for SAF production, as well as units that are able to improve the quality of raw materials for SAF production, such as palm fatty acid distillates and UCO.

Bangchak is targeting net-zero emissions by 2050 and Thailand itself has set 2065 as the year by which the nation as a whole will achieve net-zero emissions.