Emission Curbs Help Thai Jet-Fuel Firm Cushion Blow From Virus

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Thailand’s top provider of jet refueling services said its goal of greener business operations will help cushion the blow from the coronavirus outbreak, which is hurting demand by stalling tourism.

The firm, Bangkok Aviation Fuel Services Pcl, is building a 586-kilometer (364 mile) pipeline from central to northern Thailand to transport oil products for automobiles and industry. The connection is expected to be finished in 2020.

The pipeline saves on greenhouse gas emissions by replacing transportation trucks that pollute through exhaust fumes, President Prakobkiat Ninnad said. At the same time, fuel demand in the automobile and industrial sectors is less volatile than in tourism-reliant aviation, he said.

“The pipeline project is paying off thanks to correct timing,” he said in an interview in Bangkok on Tuesday. The products pumped through the connection will contribute about 900 million baht ($28.5m) of revenue in an initial phase this year, he added.

Bangkok Aviation Fuel Services said carbon credits it expects to get courtesy of the pipeline will offset other emissions, leaving it operationally carbon neutral. That calculation excludes the carbon content of the oil products themselves.

The firm has lowered its 2020 revenue growth target to 6% from 10%, reflecting the difficulties for airlines from the travel curbs imposed to slow the virus.

One key near-term objective is to boost the share of revenue from green businesses to 50% from about 20% currently, such as by investing in renewable energy and battery-powered refueling carts for airports, Prakobkiat said.

The Thai stock market and economy are reeling from the outbreak of the disease known as Covid-19. Tourism accounts for about a fifth of the economy but visitor numbers have tumbled, especially from disease epicenter China.

Shares in Bangkok Aviation Fuel Services are down 19% since the start of the year, more than the 13% drop in the benchmark SET index of Thai equities.

To contact the reporter on this story: Suttinee Yuvejwattana in Bangkok at suttinee1@bloomberg.net

To contact the editors responsible for this story: Sunil Jagtiani at sjagtiani@bloomberg.net, Natnicha Chuwiruch

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