The challenge

PTT Public Company Limited is a Thai state-owned SET-listed oil and gas company. Founded in 1978, it owns extensive submarine gas pipelines in the Gulf of Thailand, a network of LPG terminals throughout the kingdom and is involved in electricity generation, petrochemical products, oil and gas exploration and production, and gasoline retailing businesses.

In 2018, it awarded a US$1bn contract for the engineering, procurement and construction of Nong Fab LNG Terminal in Rayong, Thailand. The contract was granted to an un-incorporated joint venture, ‘SPCC JV’, between Saipem S.A. and CTCI Corporation, specifically for this large-scale project.

Saipem S.A. is a French oil and gas industry contractor owned by Saipem S.p.A., an Italy-based group company leader in engineering, drilling and construction of major projects in the energy and infrastructure sectors. CTCI Corporation is the largest engineering procurement construction (EPC) company in Taiwan, operating its business for the growing petroleum and petrochemical industry.

Challenges surfaced due to the nature of the joint venture. These were compounded by the scale, complexity, complications and unfamiliarity of the legal, regulatory and incorporation set-up of two foreign companies in Thailand.

As CTCI had a long-standing relationship with BNP Paribas both in Taiwan and Thailand, and Saipem S.A. in France and Italy, SPCC JV reached out to BNP Paribas Thailand for its advisory service, and mandated the bank as its main operating bank as soon as the project was awarded.

The solution

With a common goal, working towards meeting the demanding timelines and deliverables simultaneously, SPCC JV and the bank came together to implement a comprehensive and highly-customised robust solution for an un-incorporated joint venture account.

The working partnership engaged with the Bank of Thailand to obtain relevant applications and approvals for foreign currency (FCY) flows from PTT LNG. The integrated connectivity solution, implemented across accounts in Thailand and Singapore, provided comprehensive reporting and payment capabilities.

As a result of a strong collaboration with BNP Paribas globally, transferring funds under special approval from the Bank of Thailand, and framing cash structure between Singapore and Thailand, were successfully implemented in a quick turnaround from the execution date to meet the overall timelines.

Best practice and innovation

It was essential that all key stakeholders involved in the project were provided with critical and timely information, namely Saipem, CTCI, PTT, PTT LNG and respective house banks, and BNP Paribas Thailand/Singapore. It was a significant project and at the same time extremely complex with a large group of stakeholders, differing jurisdictions, tedious documentation, and legal and regulatory requirements.

It is a perfect example of how treasury teams from two foreign companies can rely on a common service provider to harmonise the tedious account opening and onboarding process, whilst at the same time leveraging the existing synergies of the common cash management infrastructure and global connectivity already in place.

Key benefits

• Accelerated implementation and solution delivery in record time.
• Legal expertise and advisories which facilitated Bank of Thailand approval.
• Harmonised analytics and reports across joint venture partners and ease of regulatory reporting.
• Integrated global electronic banking connectivity, allowing a secured and efficient access for joint venture partners in multiple countries.
• Facilitated transactional processing across multiple partners.
• Improved overall control and visibility.
• Streamlined operational processes with its comprehensive collection and payment.
• Optimise and improve interest yields on the excess cash/unused balance.