Oil Report

UPDATE 1-Exxon Thai unit plans $400 mln refinery upgrade

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BANGKOK, April 4 (Reuters) - Esso (Thailand), a Thai unit of Exxon Mobil Corp XOM.N, said on Friday it planned to spend $400 million to upgrade its refinery to produce products confirming to the Euro 4 pollution standard

Esso would use its cash to finance the upgrade, expected to be completed in 2011, to would boost the quality of its products mostly for domestic market, finance director Porntida Boonsa told reporters without saying when it would begin or which products.

The Thai government plans to implement the Euro 4 standards for diesel with a low sulphur level of 50 parts per million (ppm), or 0.005 percent from Jan. 1, 2012.

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

Esso operates a complex refinery with a capacity of 177,000 barrels per day, accounting for 16 percent of Thailand’s total, and a paraxylene plant with annual capacity of 500,000 tonnes, accounting for 36 percent of total capacity.

It also has 583 service stations representing a 17 percent share of the Thai retail market.

The firm plans to raise up to $454 million in an initial public offering later this month to repay debt. (Reporting by Pisit Chanyplayngam; Writing by Khettiya Jittapong; Editing by Michael Battye)