PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED AND SUBSIDIARIES FOR THE YEAR ENDED DECEMBER 31, 2021 NOTES TO THE FINANCIAL STATEMENTS - 84 - Expansion Phase Product Offtake Agreement The Company has an expansion phase product offtake agreement with a parent company and a related party, which a parent company and a related party agree to purchase 100% of the volume of refined petroleum products produce by reforming and upgrading complexes. As specified in the Product Offtake Agreement, at least 50% - 80% of such volume will be sold at a competitive domestic market price and the remaining sold at a competitive export market price or other mutually agreed price. The agreement is for the period of 18 years, commencing from the date as specified in the agreement and expiring in February 2024. The agreement is automatically renewed except for advance cancellation through written notice by each party. Long-term Crude Oil and Other Raw materials Supply Agreements The Company has entered into 2 supply agreements for crude oil and other raw materials with a parent company, the reference price being based on market price of crude oil and other raw materials. One agreement is for the period of 18 years, will expire in February 2024 and another agreement is for the period of 20 years, was automatically renewed and will expire in December 2022. These agreements are automatically renewed except for advance cancellation through written notice by each party. Crack Spread Swap Agreements The Company has entered into many crack spread swap agreements with a related party to hedge the Company’s oil refinery margin. The floating amount of the basket refinery margin (calculated crack spread based on the Singapore price of refined petroleum products, which are Naphtha, Gasoline, Gasoil, Kerosene and Fuel Oil, against the price of Dubai crude oil) is swapped for a fixed amount of the basket refinery margin for a fixed quantity per month. Under the agreements, the Company shall receive or make payment for the crack spread difference according to terms and conditions stipulated in the agreements. Product Spread Swap Agreements The Company has entered into many petrochemical product margin spread swap agreements with a related party to hedge the Company’s petrochemical margin. The floating amount of the petrochemical margin (calculated margin spread based on the key markets petrochemical products, which are Paraxylene, Benzene and other products against the Naphtha price) is swapped for a fixed amount of the petrochemical margin for a fixed quantity per month. Under the agreements, the Company shall receive or make payment of the product spread difference according to terms and conditions stipulated in the agreements. Crude Oil Price Hedging Agreements The Company has entered into many crude oil price hedging agreements to mitigate price risk with a related party. As at December 31, 2021, the Company has no oil volume under the agreements. Commodities forward Agreements The Company has entered into many commodities forward agreements to mitigate price risk with a related party. As at December 31, 2021, the Company has no volume under the agreements. Sales and Purchase Aromatics Product Agreements The Company, a parent company, related parties and various other companies have entered into many raw material and product sales and purchase agreements. The sales and purchase prices of raw material and product are based on the prices specified in the agreements. These agreements are for the periods from 1 year to 11 years 9 months, commencing from the effective date as specified in each agreement. The agreements will expire from March 2022 to December 2026. Other agreements are automatically renewed except for a cancellation through written notice by each party. 316 PTT GLOBAL CHEMICAL PUBLIC COMPANY LIMITED Form 56-1 One Report 2021
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