PTT Public Company Limited (PTT) Earnings Call Transcript & Summary

[Interpreted] Good morning. Welcome back to the second session of today's meeting of the analyst meeting for the third quarter of 2020 and 9 months of 2020. And as usual, if you have any questions, please send me your questions anytime. Without further ado, may I give the floor to Khun Auttapol Rerkpiboon, the CEO; and Khun Pannalin Mahawongtikul, the CFO.

Okay. There are some technicalities, please kindly wait. Well, for the updates for Q3 of 2020, for PTT's interim dividend, we paid THB 0.18 per share, and that's about 50% payout ratio. Dividend yield, that's about 0.4%. For the ownership of GPSC, we increased our share by 8.91%. Right now, we hold about 31.72% in GPSC, and this is in line with our ownership in our other flagship businesses. We also established the Swap & Go. Registered capital is about THB 13 million, and that's semi start-up to come up with the business model called battery swap for e-motorcycle, so that's our new S-Curve business. For e-motorcycle, normally, they would take about 2 hours for the charging. But with the swap technology, so you just fetch up the new one, and it's convenient for the riders, and it takes about a few minutes only. As of now, this year and in next year, it would be about 30 stations. And if the market expands, we would expand our business. While LNG spot price is lower, there's window opened, and then we just bought the LNG with quite a low spot price. And this year, we imported about 7 ships altogether. The average price is at $2.5 per million BTU. Our lowest with it is $1.8. And this resulted in lower pooled gas cost about -- by about 11% in Q3. Anyway, the spot price of LNG is higher than the pool price already, so there is the mine -- the demand of importing LNG is quieted down. For the subsidy of NGV, LPG, we expand and we pin the price at THB 13.62 until the end of this year. In Q4, we expect that we would have about THB 11 million subsidy as a packet, while other Q, that was millions of dollars. And for the whole year, we expect it at about THB 800 million. For others, the prices are floated during -- depending right now, the prices is floating, and the price is around THB 15.31. The subsidies of LPG, we just help fund it, the low-income household by THB 100 per person per month and 100 THB. There's about 450 users, and the subsidies is about THB 500,000. The target was THB 17 million, so it's much lower than the fund set to be used. For the awards, yesterday, we just got the award to be the excellence SOE award. We got 4 all together: state Enterprise excellence, the operation for society and environment, the award on -- and just recently, we are renewed as DJSI member. In the emerging markets, we got the highest score in the industry to be the industry leader in oil and gas, upstream and integrated. PTTEP acquired more in Algeria, and that's 24.5% more, so PTT would take 49% altogether. And that's the oil, and we expect that the first production would be around next year. Phase 1, it's about a 10,000 to 13,000 barrel per day. For Phase 2, in around 2025 for production would be around 50,000 to 60,000 barrel per day. For GPSC, Nava Nakorn power plant, which is the expansion SPP. It's COD already, but it will increase and expand by about 60 megawatt more. And for steam, it would be 10 tons more. So all together, for electricity generation, it would be 185 megawatts, and steam is 40,000 points per hour. GPSC holds 30% in Nava Nakorn power plant. For OR, OR acquired Flash. Flash is a logistic company, so that would expand our O2O business of online-to-off-line of OR. So Flash is one of the leading retail logistics business. I think it's #3 in the market. In Q3, PTT grew -- raised the capital by about debenture is THB 35 billion and USD 700 million bond. For the U.S. bond, it's 15 years, so it's ex Japan transaction that we can issue the bond as long as 50 years. So this resulted to lower the interest expense down in Q2, it's 5.19%. In Q3, it's down to 4.56%. And for our subsidiaries like IRPC, they issued debenture THB 12 billion; and GPSC, THB 5 billion. For the key drivers, I'm going to go quite fast just to give you the gist. Dubai price is up by 40% as we know well from 30.6%. And for fuel oil, it also increased by 40% as well. Petrochemical spread. HDPE-Naphtha is up by 7%. PX-Naphtha, down by 33% as the demand of aromatics is slowly picking up. And in China also, they have the high inventory while supply is increased from China and Dubai so it puts the pressure on the price. For FX at the end of Q3, baht weakened by THB 0.7. So we have the FX -- the loss from our loan, the U.S. dollars loan by a little. Now this is the key drivers. For the performance, Khun Pannalin, please?

To PTT consolidated performance Q3 and 9 months, starting in Q-on-Q. As the CEO has just mentioned, the average Dubai price in Q3 is higher by 40% Q-on-Q, so it resulted in the net income EBITDA. Also, the revenue is higher Q-on-Q by 12% because the economic has picked up after the easing of the lockdown. Sales volume increased. Many oil product is gaining back like back to normal. Revenue is increased Q-on-Q by 12%, around about 340 billion to 380 billion, so it increases in almost all of the businesses because our price picking up and higher sales volume. For EBITDA, it's higher Q-on-Q by 24% in almost all of the businesses as well. P&R, EBITDA is better mainly from the stock gain, which is increased to about 5.6 billion in Q3. While in Q2, P&R has a stock gain by THB 1.7 billion. For the refinery, market GRM is not decreased, but accounting GRM is higher because of the stock gain, while the volume is down for P&R. For petrochemical, olefin spread is higher, but aromatic spread is down, resulting in the EBITDA of this P&R. For EP, upstream EBITDA is higher is due to higher sales volume and also average higher price -- higher average price to 38 per barrel in Q3. The margin of oil in retail is higher. And for gas, also EBITDA is higher as the GSP has higher sales volume. S&M of the gas business EBITDA is better because of lower fee for gas, which is lower by 11%, while sales volume is higher by 4%. So in Q3, it's quite a good news for all of the businesses under PTT group. For net income in Q3, it's higher by 17% because of higher EBITDA. From these other items, the liberty of gain is higher. As in Q3, it's the low budget loss by -- but in Q3, it's gained at about THB 1.9 billion. So that results in a higher net income. However, the disadvantages in Q3 weaken, so we have higher FX loss. In Q2, we have FX gain by THB 7.6 billion. But in Q3, it's lost by about THB 1.2 billion because of weakened baht. When the performance is better, tax expenses is also higher, resulting in a net income of PTT. And we also have extra items in Q3 like impairment of PTT -- the mine, the coal mine in Madagascar. The impact to P&L of PTT Group, that's about THB 857 million, and this is the net income of PTT group in Q3, and that's for THB 14 billion higher by 17%. For total 9 months, revenue, EBITDA and net income compared to 9 months of last year, it's decreased because Dubai price is changed. It's down by 95%. 9 months here is USD 41 per barrel compared to 64 last year. So that resulted in revenue down 27%, down from THB 1.6 trillion to be THB 1.2 trillion, and that's because of trading P&R oil and gas, which is lower. The volume is higher in PTTEP because at the end of last year, they acquired Malaysia and purchased. And GPSC, they took over slow, so it's better in these 2 businesses. But all the other, sales volume and sales price is down both for petroleum and petrochemical. EBITDA is down by 31% from THB 222 billion to THB 154 billion, mainly it's because of the stock loss, and P&R stock loss is at THB 24 billion. Refinery, it is break down. Market GRM is down. Petchem, spread of olefin and aromatics also down. For gas business, GSP and S&M, also down. Sales volume is down because of the pandemic. And selling price is down according to the world price, and that's for GSP. PTTEP EBITDA is down from lower average selling price even though sales volume is higher after acquisition of Murphy and Partex. Oil EBITDA is down both from the average selling price and sales volume because of the pandemic. To the net income, 9 months is down by 67% from THB 75 billion last year to THB 24 billion this year, EBITDA -- because EBITDA was down. And also it was affected by other things like depreciation, which is higher because PTTEP, the [ FY ] projects and Murphy higher sales volume, so that resulted in higher depreciation. For GLOW, GPSC acquired GLOW, and we have higher depreciation from GLOW. FX gain is lower. Last year, we have the gain. But for total 9 months of this year, it's down to about THB 459 million, so that's because of the foreign exchange rate, which was down quite significantly. For derivatives, we have derivates gain. Last year, we have the loss. But this year, we have the gain. Apart from this, there is higher impairment. If you still remember, Q2, PTTEP have the impairment of Marina Oil Sand (sic) [ Mariana Oil Sand ]. In Q3, we have the impairment of the coal mine. So it affected on our net income of 9 months of this year now. So it's lower tax expense from lower performances. Breakdown in each business. PTTEP Q-on-Q. Average selling price is higher. Sales volume is higher. Average selling price is higher by 11% to $58.77. Sales volume is up by 5% from 227 to 344 KBD (sic) [ KBOED ] according to Bongkot and Contract 4 of the buyers. PTT nomination is higher. For net income, it's increased by 72% from USD 134 million to USD 230 million resulting from higher average selling price and sales volume. For the total 9 months, looking at the net income, it decreased by 46%, mainly from the average selling price, which is down by 15% to USD 36.69, which is quite significant. Mainly, it's because the liquid price, which is lower by 32%. While the gas price is slower by 6%, sales volume is up 3% according to the acquisition of Murphy and Partex at the end of last year. Net income decreased by 46%. Net income decreased by 46%. SG&A depreciation was higher and also impairment loss, DD&A of the tax reversal in 2019. But also they have the gain from financial instruments last year, they have USD 171 million. For this year, it's USD 171 million. So the net income of PTTEP is down by 16%. For PTT, our own business unit EBITDA. Gas Q-on-Q in Q3 of 2020, EBITDA of gas is better by 20%. Breaking down, almost all is better. But in fact, S&M EBITDA increased by 51%, resulting from the lower pooled gas price, which is down by 11%. Sales volume is increased by 4% to 4,426 MMSCFD. According to the COVID and easing of the lockdown, transaction is better. GSP, our gas separation plant, sales volume is higher with the demand of LPG picking up domestically. Power users has more demand, and they take more gas. For transmission line, EBITDA decreased a little bit by 3%, mainly because the extra items pertaining to the Department of Land Transport, and that's about THB 132 million resulting in the EBITDA of TM to be significantly down. For the GSP, EBITDA is higher by more than 100% because in Q2, GSP got loss from the price of petchem which is quite low, but the feed cost is quite high. But this Q, it's the gain. Sales volume has increased by 13% according to the gain in LPG to be used in the transportation sector. And petchem users has higher demand. Utilization rate of GSP is higher from 81% to 89% in Q3 because of some fewer days of shutdown. For the selling price, it's higher. Average price of all items -- almost all items is higher. EBITDA is better because of that. For the NGV, it's better by 40% because the feed cost of gas is lower. And also the price of oil is better in the retail side. With easing of the lockdown, the demand of NGV is higher. For others, NGV and LNG, EBITDA is higher by 25%. Because NGV, performance is better. It's linked to S&M because we sold our products to industrial users. S&M is getting better than NGV. It's getting better because the average selling price is higher according to the price of fuel oil, and also sales volume is higher. For LNG, it's quite flat, the number. EBITDA is a little bit up. For trading, EBITDA is down by 52% because in Q3 compared to Q2, oil price was not changed significantly. But trading, the business was good where there is much fluctuation because there are the window for the arbitrage. But in Q3, that opportunity is less, and EBITDA is down. Also, sales volume is a little bit down. For the total 9 months, EBITDA of gas is down by 31%, mainly from GSP and S&M. For S&M, EBITDA is down by 54% from THB 11 billion to THB 5 billion, and that's because of average sales volume, which is down by 80%. All customers from power generation is down by 5%. Gas separation plant is down because of the turnaround, which is more than last year. Average selling price to industrial users is down linked to fuel oil price, and also average selling price is down more than the reduction of pooled gas price. Our pooled gas price is down, but at a lower rate. TM EBITDA is up by 5%, mainly from the average selling price, which is down by 25%, and also there is the classification of right of use according to the new accounting standard. Reclassification makes the cost of sales lower by THB 80 million. SG&A of the GSP is down also. What we have to pay for the Department of Land Transport is lower this year. For the GSP, EBITDA is down by 86% according to the lower average selling price linked to the petrochemical prices in all items. For the sales volume, it's down by 13%, while the feed cost of the GSP is higher by 4%. So it means it is connected factors for all of them from the average selling price which is down, sales volume which is down, but the feed cost is higher. That's why the EBITDA is down by 86%. NGV EBITDA is positive, may gain or less loss, and EBITDA is up by 48%. Sales volume is down by 27%, while the cost of pooled gas is lower by 8%, while average selling price is quite flat. So these are all processing factors, and the performance is getting better. For our other business, it's down by 24%, mainly from the NGV, which EBITDA is down because industrial users linked the price to the fuel oil, so that's why average selling price is down and the performance is not so good. While LNG is quite stable, it is their own nature if the price is quite stable. For trading, EBITDA is up by about 17%, mainly, as previously in one, they have the opportunity to do the arbitrage according to the fluctuation in the prices, and also dilutive gains is higher even though the sales volume of the trading of the total 9 months is down by 7%. So EBITDA, this is a bit EBITDA breakdown by business. May I go to oil business, page 12. Oil business, mainly our OR. You will see that Q-on-Q sales volume of OR increased by 12% in fact. Sales volume increased, our gasoline, diesel, Jet-A1, LPG across almost every products following the easing of the lockdowns. Actually, people are very scared of public transport so they use their personal cars more. And the gross margin improved from THB 0.77, so their margin is higher to THB 1.18 per liter in Q3, mainly due to the ethyl and benzene. The marketing margin of Jet-A1 increased according to the pricing structure. For EBITDA, all business in Q3 increased by 96% due to sales volume and higher margin. If we break down into oil and non-oil, EBITDA increased 1 3 4 percent on the back of rising demand despite the less stock gain from Q2 4 7 7 down to 4 3 7, but non-oil EBITDA increased 63% due to the number of cuts from 60 million to 72 million cuts in Q3 due to outlet expansion. So adding on 102 more to Cafe Amazon outlet. International and other business, down by 32% mainly because of OR in China and Singapore due to expenses and rising interest costs. Nine months, you will see that sales volume of OR is down by about 11% as we all know due to the pandemic, pushing down sales volume whereas margin almost flat. So 1.7 to 1.8, so that's basically flat. So sales volume margin, resulting in EBITDA of all business decreased by 9%. If we look at oil business decrease, it's 12% on the back of shrinking demand, where are stock loss. Slightly down 9 months last year, 2.8; and 9 months this year, 2.4. Non-oil EBITDA was down 7% in part because of their c-store during pandemic. They were unable to open around the clock due to curfews and lockdowns, resulting their sales turnover. International and others, EBITDA increased 14% because of Cambodia allows pushing up EBITDA in international and other business. For P&R, divided into olefins. For Q3 compared with Q2, the spread improved, volume also improved. And therefore, olefins in Q3 looks good despite the maintenance shutdown of Unit 2 for 18 days and 7 days, respectively, for aromatics. Rather bad both PS and benzine spread down, and sales volume also down. The -- due to -- or actually, raw mats increase, overtaking product prices, and demand has not yet recovered and GC did the plant maintenance for 19 days. For refinery business overall for PTT, utilization rate slightly down from 95% in Q2 to 93% in Q3. Volume was down. GRM down. Some gain reflecting the performance of PTT refinery, the operation has improved. But for operating of refineries worse, but gaining or some gain. For P&R, net income down from THB 3.7 billion Q2 to THB 3.2 billion in Q3. As mentioned, olefins, petrochemical improved, aromatics. But refinery improving from stock loss, but the exchange rate. The baht, in Q2, that was strong, we have a gain of 1.76 by Q3. It's a loss of 76, and therefore, impact from FX loss is quite high resulting in net income compared to Q2 is down despite the overall improvement in operation but dampened by FX impact, 9 months. For olefins, down from products spread as well as declining market demand and sales volume. Also, maintenance shutdown this year more so than last year, resulting in decrease in performance aromatics likewise due to PX spread down despite improvement of benzene spread. For refinery, utilization rate down from 100% 9 months last year to 97%, 9 months this year. Plus the stock loss impact resulting in -- net income of this group, changing from profit of THB 15 billion to loss of THB 24 billion this year, in line with operations that are impacted with high stock loss of THB 23 billion FX changing from gains to loss last year but was shown THB 1.84 to THB 1.5. So it affects. So the impact on this group are double whammy resulting in less gains. So Q3 on call is impacted both by the pricing and the volume in terms of sales. Price is down from 52 per ton to $52 per ton in Q3, whereas cash costs are down 9% because the contractor's costs are down. Sales volume down by 31% according to the production plan. They intend to phase down production due to decrease in pricing resulting in net income in Q3 a loss because the adjust phase micro business, it will be the tax lawsuit case 5.5, so sometimes receive, some time payout. So Q3 paying out 5.5 million and therefore booking the loss at 4.2 million in Q3 for 9 months. Core business operations down compared with last year by 85% in terms of net income as a result of both pricing and volume. Pricing down 17%, volume 20% down. And another factor of the tax payment situation last year, we received 30 million the lawsuit. This year, we received only 7.8 million. So that's the very end affecting the performance of core business. For power, GPSC, you will see that the net income Q-on-Q 9 months improved amongst across the board, mainly due to acquisition of GLOW. But Q-on-Q sales volume was actually down slightly 4% overall picture because of 8% electricity sale and staying 2% higher because GHECO-One shutdown for 8.5 days and GLOW Phase 5 also shutdown for maintenance from 4th of June to 18th of October, and so sales down. The average sales price of SPP down 9%, in line with average NG cost. It's down resulting in net income up 36% from gross margin SPP higher. Also the benefits from affiliates mainly Xayaburi hydro, 506 million because they have produced more during rainy season and dividends from Ratchaburi Power, THB 270 million. So 9 months, net income increased more than 100% resulting from average sales volume increase for recognizing GLOW fully 9 months. Whereas last year, they started recognizing GLOW around March, so not full 9 months. So sales costs down by 7% from 282 to 263 MMBTU. For net income, as I mentioned, increased more than 5% on the back of gross profit margin in line with lower average cost and financing costs also down. If you recall, last year, they have quite high interest burden due short-term loan to acquire GLOW. So after paying back the loans and et cetera, finance cost is down plus the dividends from Xayaburi COD in October last year, and so the 3 months performance improved. Now a cash waterfall Q3 compared with Q2. If you look at the operating net income, it has improved by 4%. When it comes to net income, incorporating other items improved by 17% broken down by category. The class 1 cost factors come from margins improving by 15 billion across virtually all categories, E%P or refinery, petrochem and gas. But only trading that decreased due to less opportunities for arbitrage and core business, less margins. So these are negative factors, but overall margins improved. Stock gain improved as positive factor. Stock gain, 23,000 to 6,000. So that's positive impact OpEx. We were able to cut down. OpEx is native impact from Q2 15 down to -- or up to 16.7 in Q3. The pre and amortization improved slightly 12 million. And others improved 1 million to 3 million, mainly from recognition of the pre of oil less than Q2 when a recognition of Mariana Oil Sands impairment, which was higher FX and derivatives, negative impact by about 2.4 billion, as I say. FX loss is actually higher than derivatives gain. For interest and CIT, negative impact to 9 -- 8.9 billion because in CI higher in line with the operations and interest higher due to the debentures and borrowing of PTT Group and higher tax cost for the operation. So that's the waterfall of Q2 compared with Q3. Now let's take a look at the balance sheet, the assets of PTT Group. Slightly higher by 3% from to THB 2.3 trillion to THB 2.5 trillion. The assets that increased. Cash in short-term investments higher by about 91 billion mainly because of borrowing after netting 9 months. PTT groups borrowed more by about 100 billion, so that's the increase for short term. It's attributable to that. The right of use, higher 69 billion due to new accounting standards, the IFRS 16. So right of use, higher. The account receivables down by 35% on -- according to the pricing and volume, so this is linked to receivables, which I will elaborate. Inventories down 18% according to factors regarding volume and sales price now. Liabilities interest-bearing debt, higher 25%. So 160 billion resulting from long-term loans, higher, 150, but less short-term, lower 35. As I say, GPSC paid back those loans and according to lease contracts due to the IFRS 16 and receivables down 36% as I said the less pricing and volume. Others down 16% due to other items and less accrued income tax. So equity share down by 14 million -- 14 billion because of the dividend payout and less gains. Net debt-to-EBITDA higher from 1.14 to 1.80 to because of additional borrowing and applications according to lease contracts and less EBITDA due to decreased operations, but we remain in the policy of 2 and net debt-to-equity from 0.25 to 0.31. Again, in line with the financial obligations and equity a little bit down. For cash flows from operation, it's still positive at 152 cash flow from operation. But it's being spent on investment 180 mainly in investment. As we all know, the Thai Oil GC construction projects PTT itself to the tune of 100. And current investments, savings and stuff, 87. And investment in subsidiaries, 3.5 billion. And receiving from financial assets 8 billion. Receive of dividend interest, 6, resulting in our cash flow in minus of 31. But financing, it's receiving turn 37 billion because we have prepared the loans of 87 billion. On dividend payment, 45 billion. Finance cost paid, 18 billion. And received for loans, bonds, 188. Resulting in net-net at 15 billion. Beginning cash, 290. So in cash, 300, but we have current investment of about 114 billion. Resulting in ending cash and short term investment combined at 422 billion, which is secured under the circumstances when we have to keep cash first. And every company would do these given opportunity.

Now we are going to the outlook. Starting from global economic outlook. There's a term, a long, uneven and uncertain ascent. So what does it mean? So it means the recovery will take time before we can get to the pre-COVID situation, and it's uneven. It depends on the ability to cope with the pandemic in each country. It depends on the capability of each sector, and it's uncertain. There are uncertainties to go until we have COVID-19 vaccine availability. IMF has done the forecast in 2020. They see that the whole world would be at minus 4.4%. The forecast in June, that was forecasted at minus 4.9%. And next year, it would be 5.2% growth. We would see the growth after the easing of the lockdown. And also there are stimulus fiscal policy of each country, injection of money. Totally, it would be THB 12. 2 trillion. So money is injected into the economy. But on the downside, it would take time to get back to normal. There would be slow down of investment because of uncertainties. And there are many factors that we have to keep an eye on. For example, the geopolitical conflict in France, with the Muslim and the Vienna terrorists and also the trade war between U.S. and China. Right now, we have Biden as a new president. But in the big picture, China and the U.S. will have some kind of conflict in a way. But at what degree, this is what we have to keep an eye on. Now back to Thailand. Thailand economic outlook in 2020, it would be minus 6%. The new figures would be a little bit better, like near to minus 6%. And in 2021, it would be about 3%, 4%, 5% of growth because of the resumption of domestic economic activities. Exports in some areas would be better like food, or the new normal products, work from home gadgets, hygienic mass packaging. And also, there are economic stimulus from the authority. Tourism in Thailand might not be so bright. Household sector, business sector would be more careful in spending. And also, there are some political tension in Thailand as well. For tourism, that takes 12% of our GDP, that's the main factor. Now to petroleum. Our petroleum products outlook. Dubai is expected to be better compared to pre-COVID stage. Next year, it would be $44 to $49 per barrel. OPEC would cut consumption until the end of the year. Their plan is that at the beginning of next year, they would cut down that production to be 5.8. But recently, they talked among themselves, and they would crack down about 7.7 million barrel per day, but we have to keep an eye on it. For geopolitical risk, in Iran, Venezuela or Iraq, that would affect the price as well. Or the pandemic, it would still be there. For the supply, maybe a crude oil production would be increased from 500,000 to 1 million per day. For the product prices for gas next year, it would be around 50 to 55 gas oil, 52 to 57 fuel oil, 38 to 43. C4 GRM is expected to be at around USD 1 to USD 2 per barrel. For gas prices, Asian spot LNG would be at around USD 4.8 to USD 5.3 per barrel. For Henry Hub, it would be around 2.2 to 3.2 per barrel. Petrochemical outlook olefins. Demand will pick up with the easing of the lockdown measures. There are still pressure on PE and PP. New supply from Southeast Asia and China. HDPE prices would be up from 850 to 870 this year to 890 to 950 next year. PP turn price is around 940 to 960 this year to be USD 940 to USD 1,000 per ton next year. Aromatics, PX, benzene markets, it would be more tense. It might not be as good as olefin, but it would be more balanced because of economic recovery and the additional demand from PTA and SM new capacity. On the down side, the inventories in China is still high, and that would be PX, benzene capacities from China, which would be added up next year. For the benzene price, this year is 450 to 470 per tons. Next year, it would be 460 to 570. PX, the current price is 560 to 580 per ton to be 580 to 690 this year. For naphtha, demand would be from the new petrochemical factories rising up in Asia. Naphtha prices, it would be higher from average rate this year, USD 325 to USD 435 to USD 400 to USD 440 per ton next year. Guidance and trends in Q4 of 2020. For gas price, the average price would be lower by 8% to 10% Q-on-Q. Gas separation plant, new rate would be higher. It should be around 93% to 95%. Gas GSP 5 would be down by 50%, only that for 27 days to change the boiler. For other projects: COD, GC, Map Ta Phut retrofit. Ethylene, 500k ton. Propylene, 250k ton. PO, folio, 330k ton. For GSP, battery pilot plants using semi-solid technology, capacity is about 30 megawatt hour. That's from the tight. Technology is 24 hours -- 24m, sorry. I'm thinking about 24/7 working hour. PTT Group GRM is expected in Q4 to be higher, in line with the market trend. In Q4, average should be about $1 per barrel. While previously, it's not $1 yet. Recovery in 2021, we expected that business would be better in PE. We would have more volume with competitive costs because PTTEP focuses on excellence. Gas would be down by 5% to 7% with higher volume. Production capacity is higher to be 95% to 97%. EBITDA would be stable from pipeline and LNG. We expect stable EBITDA from here. For P&R, petrochemical and refinery, GRM is expected to be higher to be 3.1 to 3.3 per barrel with a higher spread. Power, we expect strong and stable contribution according to the nature of the business. The projects in the pipeline. Ratchaburi-Wangnoi natural gas pipeline, progress is 99.5% expected to be completed next year. Rayong Waste to Energy project, progress is 84%, expected to be completed Q2 of next year. LNG terminal #2, progress is 58.7%, expected to be completed in 2022. For the 5th pipeline, we have 3 phases altogether. Phase 1, expected to feed the gas into the network in October 2020 this year. Phase 2 is expected to be completed in 2021. And Phase 3, we are in the process of sourcing the contractor, expected to COD within 2022. For the maintenance shutdowns, GSP, it would be in Q3 and Q4, the second half. For GC, it would be the second half as well. For the announcement on gas leak incident. On the 22nd of October, there was a leakage of 36-inch gas pipeline from Bang Pakong to Wangnoi in south district Bang Bo, Samut Prakan province. We have used this pipeline for 24 years already. Its life cycle is 40 years. According to the maintenance plan, it is in accordance with the international standards ASME B31.8. The cause -- well, to the impact, it doesn't impact the environment. We already tested the quality of the soil, the air and water. Methane doesn't affect much. Actually, it's mainly the heat. The Department of Energy, which looks after the safety, set up the working group to look into the cause of the leakage. And PTT fed all the information to related entities. We sent in the samples of the pipeline to MTEC, the Metal and Material Technology Center to examine the components. Impact to the business, we closed one NGV station, but there's no impact to any gas customers. The damaged pipeline was damaged for about 300 meters in length and lost around 25,000 million BTU, which is worth about THB 5 million. For the insurance, we have the insurance policy. For the business impact, that is deductible, which is quite high. We cannot claim back THB 5 million. But for the cap to cover third party. The third-party liability insurance, in principle, it would cover for the medical care property damage, business damage and the compensation for the deceased. For the standards for inspection and maintenance and surveillance of gas pipeline, it's according to the international standard. And we have the SCADA system to control and monitor the transportation of gas. And with these standards, we can close the cap, and this was the 9 minutes of the explosion because we can detect the pressure, which is boosted up with the accident. So that's the SCADA systems. We have the system to detect and inspect the pipeline, both inside and outside the pipeline. While, for pipeline #2, it was done last year, and there was no irregularities detected according -- concerning the metal surface. There is no erosion. It's in -- it was in normal situation. So we are now trying to identify the cause of the explosion. But in the meantime, we would ensure the safety and increased patrol frequency. We double the inspection of the gas pipeline so that there is no third party or any outsider getting into the area. According to the law, there should be authorized -- it should be authorized by the regulators, and we also have the sign showing where is the areas of the pipeline. And after we inspected the area, these signage were in place, all of them. For the compensation and how we take care of the affected. After the incident, we had to communicate with the press. So for issue management, we sent in the rescue team, by the way, to take care of the wounded. We have the mobile medical units sent in. Temporary accommodation, taken care of. Looking after the food and drinking water and looking after people in the neighborhood so that they felt safe and back to normal as soon as possible. We scale out and identify the area as a special area to take care of. We also provided a relief fund to the people affected for the deceased. They would get 5 million. There are 3 deceased or the seriously injured, they would get THB 2.5 million. The hospitalized would get THB 200,000. For the injured but are not hospitalized, they will get THB 50,000. For the press, if you look at the graph, the red one, red line is the positive -- negative. The blue is neutral, and the green is positive. So a few days after the incident, there would be some press release giving the negative effect to PTT. But as we get into respond to the accident, negative factors was down. And right now, there was no negative impact anymore. We try to keep on the green line, like at least the press release on the remedy given and the fund given to the affected. So I think, in overall, issue management concerning press release was done quite good. The remaining issue is the cause of the explosion. Once is identified, then more remedy will be given to the remedy, I think, and that this is all according to the information as of now.