Thai PTT Aromatics says may cut 2008 investment

BANGKOK, April 10 (Reuters) - Thailand's PTT Aromatics and Refinery PCL PTTAR.BK said on Thursday it may cut its 2008 investment plan from $557 million due to a lower-than-expected budget for a refinery upgrade needed to comply with a pollution standard.

"We are reviewing this year's investment plan. We previously set $557 million budget. Now, it should be lower because budget for refinery upgrade should be less than what we earlier expected," managing director Chainoi Puankossom told reporters.

PTTAR, the result of a merger between Rayong Refinery and Aromatics (Thailand), would finalise the budget in May. The company had originally estimated it would need more than $100 million for the refinery upgrade, he said.

Oil refiners in Thailand have to upgrade refineries to boost product quality to meet the Euro 4 pollution standards, which the Thai government plans to implement from Jan. 1, 2012.

The Euro 4 standards for diesel requires a low sulphur level of 50 parts per million (ppm), or 0.005 percent.

Thailand currently uses Euro 3 specifications for diesel with a sulphur level of 350 ppm, or 0.035 percent.

The company's gross refining margin was expected to be in range of $5-6 a barrel this year from $6.46 in 2007, Chainoi said.

PTTAR will have Thailand's largest refinery capacity of 280,000 barrels per day in December when it plans to complete building its reformer complex 2 to raise its capacity by 65,000 bpd, he said.

The company is also building a second aromatics plant to boost capacity to 2.23 million tonnes a year from 1.19 million tonnes in September 2008, he said.

PTTAR shares were down 0.66 percent at 37.50 baht on Thursday close, while the main Thai index .SETI was down 0.63 percent. ($1 = 31.60 Baht) (Reporting by Pisit Changplayngam; Writing by Khettiya Jittapong, Editing by Erica Billingham)