E

-TRANSLATION
The English Translation of the Independent Financial Advisors Opinion has been prepared solely for the convenience of
foreign shareholders of Bangkok Aviation Fuel Services Public Company Limited and should not be relied upon as the definitive
and official document. The Thai language version of the Independent Financial Advisors Opinion is the definitive and official
document and shall prevail in all aspects in the event of any inconsistency with this English Translation.
No. 012/2016
January 27, 2016
Subject Opinion of the Independent Financial Advisor Concerning Asset Acquisition of Bangkok
Aviation Fuel Services Public Company Limited
To Shareholders
Bangkok Aviation Fuel Services Public Company Limited
Attachment: 1) Overview of business operation and performance of Fuel Pipeline Transportation

Limited
Overview of business operation and performance of Bangkok Aviation Fuel Services
Public Company Limited is presented in Section 5 of the Information Memorandum
concerning Asset Acquisition, enclosed with the Notice of the Extraordinary General
Meeting of Shareholders.
References:1) Resolution of the Board of Directors Meeting of Bangkok Aviation Fuel Services
Public Company Limited No. 5/2015 held on December 17, 2015.
2) Information Memorandum concerning Asset Acquisition of Bangkok Aviation Fuel
Services Public Company Limited, dated December 17, 2015.
3) Annual registration statement (Form 56-1) of Bangkok Aviation Fuel Services Public
Company Limited for the year ended December 31, 2014.
4) Audited financial statements of Bangkok Aviation Fuel Services Public Company
Limited for the 12-month period ended December 31, 2012 - 2014 and reviewed
financial statements for the nine-month period ended September 30, 2015.
5) Audited financial statements of Fuel Pipeline Transportation Limited for the 12-month
period ended December 31, 2012 - 2014 and reviewed financial statements for the
nine-month period ended September 30, 2015 (but there is no issuance of the
reviewed financial statements).
6) Affidavit, Memorandum of Association, other information and documents, including
interviews with the management and concerned staff of Bangkok Aviation Fuel
Services Public Company Limited and Fuel Pipeline Transportation Limited.
Disclaimers: 1) The study results of Capital Advantage Co., Ltd. (Independent Financial Advisor or
IFA or CapAd) in this report were based on information and assumptions
provided by the management of Bangkok Aviation Fuel Services Public Company
Limited and Fuel Pipeline Transportation Limited, and also the information of the
Company disclosed to the public on the websites of the Securities and Exchange
Commission (www.sec.or.th) and the Stock Exchange of Thailand (www.set.or.th).
2) CapAd shall not be responsible for profits or losses and any impacts resulting from
this transaction.
3) CapAd conducted the study with knowledge, skills, and carefulness and on the
basis of professional ethics.
4) CapAd has considered and provided opinion based on the situation and information
at the present time. If such situation and information have changed significantly, the
study results in this report may change accordingly.
The Board of Directors Meeting of Bangkok Aviation Fuel Services Public Company Limited
(the Company or BAFS) No. 5/2015, held on December 17, 2015, passed a resolution to approve
Fuel Pipeline Transportation Limited (FPT), the Companys subsidiary, to enter into an asset
acquisition transaction by investing in the Extension of Fuel Pipeline Transportation System to
Capital Advantage Co., Ltd.

6 6 / 2 2 L a d p r a o 8 0 , W a n g t h o n g l a n g , B a n g k o k 1 0 3 1 0 , T h a i l a n d
Tel : +66 8 6565 9900 Fax: +66 2530 5927 www.capital adv antage.co.th
Opinion of the IFA -TRANSLATION- Bangkok Aviation Fuel Services PCL.
Northern Region Project (the Project or the North Pipeline Project) with an approximate investment
value of Baht 7,759 million.
The North Pipeline Project is considered as an asset acquisition transaction of the listed
company under the Notification of the Capital Market Supervisory Board No. TorChor. 20/2551
regarding Rules for Entering into Substantial Transactions within the Definition of an Acquisition or
Disposition of Assets and the Notification of the Board of Governors of the Stock Exchange of
Thailand regarding Disclosure and Compliance by Listed Companies relating to Acquisition or
Disposition of Assets B.E. 2547 (Notification of Acquisition or Disposition). The highest transaction
size, calculated on the total value of consideration basis, is equal to 93.18% of total assets of the
Company and its subsidiaries as of September 30, 2015.
After aggregating such transaction with asset acquisition transactions of the Company and its
subsidiaries occurring in the previous six months consisting of the Companys annual investment
budget of 2016 which was approved by the Board of Directors Meeting of the Company No. 4/2015
held on November 5, 2015 amounting to Baht 123.03 million and the subsidiaries annual investment
budget of 2016 which was approved by the board of directors meeting of each subsidiary totaling
Baht 94.29 million (consisting of Fuel Pipeline Transportation Ltd. amounting to Baht 78.00 million and
Thai Aviation Refuelling Co., Ltd. amounting to Baht 16.29 million), making up a total annual
investment budget of 2016 of Baht 217.32 million or equivalent to transaction size of 2.61%, the total
size of such asset acquisition transactions is 95.79% of total assets of the Company and its
subsidiaries as of September 30, 2015. The transaction is therefore deemed as an acquisition of
asset, type 1, pursuant to the Notification of Acquisition or Disposition with transaction value equal to
or higher than 50% but lower than 100%.
Therefore, the Company is required to prepare a report and disclose information on the asset
acquisition transaction to the Stock Exchange of Thailand (SET), and obtain an approval from the
shareholders meeting with a vote of not less than three-fourths of total voting rights of shareholders
who attend the meeting and are eligible to vote, excluding the votes of shareholders with a conflict of
interest.
In this respect, the Company has appointed Capital Advantage Co., Ltd. as the independent
financial advisor (Independent Financial Advisor or IFA or CapAd) to render opinion to the
Companys shareholders regarding reasonableness and fairness of price and conditions for the said
asset acquisition transaction.
In rendering opinion on such transaction, CapAd has studied details of the Information
Memorandum concerning Asset Acquisition of the Company dated December 17, 2015, information
obtained from interviews with the executives and management of the Company, FPT and FPTs
financial advisor, documents available from the Company, FPT and FPTs financial advisor such as
assumptions for financial projection preparation, implementation plan for the North Pipeline Project,
Memorandum of Understanding (MOU) on cooperation in the North Pipeline Project between the
Department of Energy Business, Ministry of Energy, and FPT, documents relating to the transaction,
publicly available information, information posted on websites of the SET and the Securities and
Exchange Commission (SEC), financial information derived from various websites, and so on.
CapAd cannot certify or guarantee the accuracy or completeness of the information obtained from the
Company and FPT and/or the executives and/or the management of the Company and FPT and/or
FPTs financial advisor.
In rendering opinion to the shareholders, CapAd has studied and analyzed the information
mentioned above and has considered reasonableness, price, conditions and all relevant factors with
due care and rationale in accordance with sound professional standards and in the interest of the
shareholders.
The opinion provided herein is based on the assumption that all such information and
documents are reliable, correct, and complete, and is, moreover, based on the situation and
information available to our knowledge at the time of preparing this report. If there is any change or
incident arising, it may have a material impact on business operation and financial projection of the
Company and/or FPT, as well as the shareholders decision regarding the entering into this asset
acquisition transaction.
The documents appended to this opinion report of the IFA are deemed as an integral part of
this report and are recommended to be considered by the shareholders in conjunction with this report.
CapAd has considered and studied information on the asset acquisition transaction, the
details and results of which can be described as follows:
Capital Advantage Co., Ltd. Page 2/31

Abbreviation
The Company or BAFS Bangkok Aviation Fuel Services Public Company Limited
FPT Fuel Pipeline Transportation Limited, a subsidiary of BAFS
JP-One JP-One Asset Company Limited
TARCO Thai Aviation Refuelling Company Limited, a subsidiary of BAFS
Thappline Thai Petroleum Pipeline Company Limited
Thappline Pipeline Connecting Station Station connecting FPTs fuel pipeline with Thapplines fuel pipeline
The Project or North Pipeline Project The Extension of Fuel Pipeline Transportation System to Northern Region Project
Lower North Covering 11 provinces, namely Nakhon Sawan, Uthai Thani, Kamphaeng Phet,
Tak, Sukhothai, Phitsanulok, Phichit, Phetchabun, Uttaradit, Phrae and Nan (such
grouping is not made on a geographical basis, but based on the provinces
expected to use services from Phichit Depot)
Upper North Covering 6 provinces, namely Chiang Mai, Lamphun, Lampang, Phayao, Chiang
Rai and Mae Hong Son (such grouping is not made on a geographical basis, but
based on the provinces expected to use services from Lampang Depot)
Index Index International Group Company Limited
BOI Board of Investment
NEPC National Energy Policy Committee
DOEB Department of Energy Business
ONEP Office of Natural Resources and Environmental Policy and Planning, Ministry of
Natural Resources and Environment
MOU Memorandum of Understanding
Km. Kilometers
Independent Financial Advisor or Capital Advantage Company Limited
IFA or CapAd
SEC The Office of the Securities and Exchange Commission
SET The Stock Exchange of Thailand
Notification of Acquisition Notification of the Capital Market Supervisory Board No. TorChor.
or Disposition 20/2551 regarding Rules for Entering into Substantial Transactions within the
Definition of an Acquisition or Disposition of Assets and Notification of the Board of
Governors of the Stock Exchange of Thailand regarding Disclosure and
Compliance by Listed Companies relating to Acquisition or Disposition of Assets
B.E. 2547 and as amended
EIA Environmental impact assessment
IRR Internal rate of return
NPV Net present value
Payback Period Period of time required to reach the break-even point
WACC Weighted average cost of capital

Executive Summary
The Board of Directors Meeting of Bangkok Aviation Fuel Services PCL. (the Company or
BAFS) No. 5/2015, held on December 17, 2015, passed a resolution to approve Fuel Pipeline
Transportation Ltd. (FPT), the Companys subsidiary, to enter into an asset acquisition transaction
by investing in the Extension of Fuel Pipeline Transportation System to Northern Region Project (the
Project or the North Pipeline Project) with an approximate investment value of Baht 7,759 million.
The North Pipeline Project is considered as an asset acquisition transaction of the listed
company under the Notification of the Capital Market Supervisory Board No. TorChor. 20/2551
regarding Rules for Entering into Substantial Transactions within the Definition of an Acquisition or
Disposition of Assets and the Notification of the Board of Governors of the Stock Exchange of
Thailand regarding Disclosure and Compliance by Listed Companies relating to Acquisition or
Disposition of Assets B.E. 2547 and as amended (Notification of Acquisition or Disposition). The
highest transaction size, calculated on the total value of consideration basis, is equal to 93.18% of
total assets of the Company and its subsidiaries as of September 30, 2015. After aggregating such
transaction with asset acquisition transactions of the Company and its subsidiaries occurring in the
previous six months with a combined transaction size of 2.61%, the total size of such asset
acquisition transactions is equal to 95.79% of total assets of the Company and its subsidiaries as of
September 30, 2015. The transaction is therefore deemed as an acquisition of asset, type 1, pursuant
to the Notification of Acquisition or Disposition with transaction value equal to or higher than 50% but
lower than 100%.
acquisition transaction to the Stock Exchange of Thailand (SET), and obtain an approval from the
shareholders meeting with a vote of not less than three-fourths of total voting rights of shareholders
who attend the meeting and are eligible to vote, excluding the votes of shareholders with a conflict of
interest.
Capital Advantage Co., Ltd. has been appointed by the Company as the independent
financial advisor (Independent Financial Advisor or IFA or CapAd) to render opinion to the
Companys shareholders regarding reasonableness and fairness of price and conditions for the said
asset acquisition transaction.
CapAd has determined reasonableness of the transaction and is of the opinion that the North
Pipeline Project will enable FPT to achieve solid and sustainable growth in its business performance
in the future and help to expand its existing business. BAFS, as the parent company and the major
shareholder of FPT, will benefit from recognition of a growing performance of FPT from the
investment in this project which will generate long-term returns for the Company in the form of
dividend income, thus relatively providing the Companys shareholders with a favorable rate of return
in the long run.
The project corresponds with the Ministry of Energys policy to promote the extension of fuel
pipeline transportation system to the northern and northeastern regions so as to gear up for growth in
fuel consumption in such areas. It will enhance the energy stability of the country and also increase
fuel transportation efficiency by developing basic infrastructure for fuel transportation to the provincial
area. Moreover, it helps promote the free trade policy by allowing all fuel traders to access the service
at an equal tariff rate and, thus, to remain competitive with road and rail fuel transport. It also helps
preserve environment and reduce road accidents. Last but not least, it helps support the expansion of
fuel consumption in ASEAN region and accordingly helps enhance the countrys competitiveness in
its move towards becoming the regional energy hub and prepare for the entering into ASEAN
Economic Community or AEC.
The benefits that the Company will obtain from entering into this transaction are (1) growth in
income and improve operating performance of FPT and the Company; (2) privileges from investment
promotion; (3) no control dilution or earnings dilution effect on the Companys shareholders due to the
investment in the Project; (4) an opportunity for FPT to extend the Fuel Pipeline Transportation
System Phase 3 to Myanmar; (5) an opportunity for FPT to extend its fuel pipeline transportation
service to airports in the northern region; (6) the project helping to enhance the countrys fuel
transportation efficiency; (7) the project providing benefits for the private sector and the business
sector; and (8) the project helping to reduce road accidents and preserve environment.
However, there are some disadvantages and risks from entering into the transaction as
follows: (1) FPT and the Company will have higher debts and D/E ratio; (2) In the event that the
Companys shareholders meeting does not approve the asset acquisition transaction, FPT and the
Company (in the consolidated financial statements) must record the project expenses already paid by
FPT; (3) Risk of the Project does not perform as expected; (4) Risk involved with the regulatory

bodys control over pipeline tariff in the future; (5) Risk associated with a success in negotiation about
fuel pipeline connection with Thai Petroleum Pipeline Co., Ltd. (Thappline); (6) Risk involved with
application for a fuel depot construction permit from Tambon Mae Kua Administration Organization,
Sop Prap District, Lampang Province; (7) Risk involved with approval from the Office of Natural
Resources and Environmental Policy and Planning (ONEP), Ministry of Natural Resources and
Environment, and application for business license type 3 from the Ministry of Energy; (8) Risk
associated with acquisition of the required land area at the desired price for constructing five booster
pump stations and Thappline Pipeline Connecting Station; (9) Risk of foreign exchange fluctuation;
(10) Risk in obtaining loans for FPTs project investment and for BAFSs investment in newly issued
shares of FPT; (11) Risk associated with an increase of pipeline land lease fees by the Department of
Highways, Department of Rural Roads and Royal Irrigation Department; (12) Risk incidental to
management of communities that the fuel pipeline passes through and communities in the area of
Phichit and Lampang Depots; and (13) Risk of technological changes.
In view of the objectives and necessity of the transaction, coupled with strengths,
weaknesses, benefits and risks involved, the IFA is of the opinion that the transaction will enable the
Company and FPT to gain more benefits and business opportunities with an acceptable level of
business risks, and will be substantially beneficial to the country and the public. Therefore, the
entering into the asset acquisition transaction is deemed reasonable.
The IFA has identified appropriateness of the investment in the North Pipeline Project of FPT
and views that the project investment is viable. The projects net present value (NPV) of free cash
flow is in a range of Baht 203.04 - 440.58 million (or equivalent to Baht 152.28 - 330.43 million for the
Companys 75% ownership in FPT), with an IRR equal to 9.38% 9.63% per annum and a payback
period of about 14.13 14.41 years. Thus, the project investment is deemed appropriate and will
provide a reasonable rate of return at an acceptable level of risks.
Based on the reasonableness of the transaction and fairness of price and conditions for the
transaction as discussed above, the IFA recommends that the shareholders should approve the
said asset acquisition transaction.
The shareholders are recommended to study information in all documents attached to the
notice of the meeting to be a basis for your voting decision. However, the decision whether to approve
the transaction depends primarily on the shareholders discretion and judgment.
CapAd, as the IFA, hereby certifies that we have expressed the above opinion with due care
and under professional standards by paying regard to the shareholders interest.
Details of the IFAs opinion are as follows:

Part 1: General Information on the Asset Acquisition Transaction
1. Nature and Details of the Transaction

1.1 Details of the Transaction
The Board of Directors Meeting of Bangkok Aviation Fuel Services PCL. (the Company or
BAFS) No. 5/2015, held on December 17, 2015, passed a resolution to approve Fuel Pipeline
Transportation Ltd. (FPT), a subsidiary in which the Company holds 75.00%1 of shares, to enter into
an asset acquisition transaction by investing in the Extension of Fuel Pipeline Transportation System
to Northern Region Project (the Project or the North Pipeline Project) with a total investment cost
(including land lease fee throughout the 30-year land lease agreement term) of approximately Baht
7,759 million.
The North Pipeline Project will be extended from the existing fuel pipeline system of FPT. The
investment is divided into two phases, Phase 1: Bang Pa-In Phichit with a distance of 365
kilometers and Phase 2: Kamphaeng Phet Lampang with a distance of 220 kilometers. FPT will
enter into 30-year land lease agreement(s) with the Department of Highways and Department of Rural
Roads to lay the fuel pipeline along the highways to facilitate fuel transportation to provinces in the
northern region. Total lease fee throughout the lease period is around Baht 259 million.
Moreover, FPT will build fuel depots in Phichit and Lampang Provinces. Due to the long
distance of fuel transportation, FPT also needs to construct five booster pump stations in Singburi,
Nakhon Sawan, Kamphaeng Phet, Tak and Lampang as well as the pipeline connecting station with
fuel pipeline of Thai Petroleum Pipeline Co., Ltd. (Thappline) between Lam Luk Ka District of
Pathum Thani Province and Chiangrak Noi District of Phra Nakhon Si Ayutthaya Province, in order to
expand fuel transportation service with Thappline from Thapplines Saraburi Depot to the northern
region.
1.2 Date of the Transaction

FPT will enter into the asset acquisition transaction after having obtained an approval from
the Extraordinary General Meeting of Shareholders of the Company No. 1/2016, which will be held on
February 24, 2016, and having complied with the applicable laws. The project construction will
commence after FPT has fulfilled the conditions precedent specified in Part 1, Clause 1.9.
1.3 Parties Involved and Their Relationship

1) Long-term land lease agreement
Lessee : Fuel Pipeline Transportation Ltd. (FPT)
Lessors : Department of Highways and Department of Rural Roads whose land
the fuel pipeline will pass through
Relationship between lessee and lessors : No connection or relationship with the Company
2) Construction and laying of fuel pipeline system

3) Employment of a consulting firm to undertake the project design and supervision
Employer : Fuel Pipeline Transportation Ltd. (FPT)
Contractor(s) : Under bidding preparation process
Relationship between employer and : No connection or relationship with the Company
contractor(s)
4) Land acquisition to build Phichit Depot

Buyer : Fuel Pipeline Transportation Ltd. (FPT)
Sellers : Major Chan Yongpod
Ms. Vanida Angkuldee
Vachirachai Garden Home Ltd. Part.
Relationship between buyer and sellers : No connection or relationship with the Company
5) Land acquisition to build Lampang Depot
Sellers : 35 individual persons*
1
As of January 19, 2016, the Company sold existing 8,628,742 shares of FPT or 16.55% of FPTs paid-up capital to Bangkok
Airways PCL. and PTG Logistics Co., Ltd., resulting the Companys shareholding in FPT reduced to 39,100,184 shares or
75.00% of FPTs paid-up capital.
In the case that the Extraordinary General Meeting of Shareholders of the Company No. 1/2016, to be held on February
24, 2016, approves this asset acquisition and the Extraordinary General Meeting of Shareholders of FPT approves the capital
increase, FPT will increase its capital by way of the rights offering in the amount of approximately Baht 3,400 million.

Remark: * There were 44 title deeds in total. Some sellers sold more than one title deed, and there were two co-owners in
some title deeds (two sellers/title deed).
6) Construction of Phichit Depot and Lampang Depot
Employer : Fuel Pipeline Transportation Ltd. (FPT)
Contractor(s) : Under bidding preparation process
Relationship between employer and : No connection or relationship with the Company
contractor(s)
7) Land acquisition to build booster pump stations in Singburi, Nakhon Sawan, Tak and
Lampang
8) Land acquisition to build a booster pump station and offtake station in Kamphaeng Phet
9) Land acquisition to build a pipeline connecting station with fuel pipeline of Thai Petroleum
Pipeline Co., Ltd. (Thappline)
10) Procurement of pipe, pump, valve and equipment
Sellers : Under selection process
1.4 General Characteristics of the Transaction

The Board of Directors Meeting of the Company No. 5/2015 on December 17, 2015 passed
the resolution to approve FPT, the Companys subsidiary, to enter into the asset acquisition
transaction by investing in the North Pipeline Project. The project is divided into two phases, Phase 1:
Bang Pa-In Phichit with a distance of 365 kilometers and Phase 2: Kamphaeng Phet Lampang
with a distance of 220 kilometers. FPT will enter into 30-year land lease agreement(s) with the
Department of Highways and Department of Rural Roads to lay the fuel pipeline along the highways.
FPT has acquired land to build two new fuel depots in Phichit and Lampang Provinces, with
details as follows:
(1) 13 land plots in Phichit Province (later combined into four plots) with a total area of 120-
2-22 rai (after title deed consolidation and do cadastral survey, the land area becomes 118-3-33 rai)
at a total value of Baht 57.50 million (the ownership of all land plots was transferred to FPT on
December 28, 2015); and
(2) 44 land plots in Lampang Province with a total area of 83-2-3 rai at a total value of Baht
23.71 million (the ownership of all land plots was transferred to FPT on December 1, 2015), with
additional land acquisition of around Baht 7.00 million being underway.
Due to the long distance of fuel transportation, FPT needs to construct five booster pump
stations in Singburi, Nakhon Sawan, Kamphaeng Phet, Tak and Lampang as well as a pipeline
connecting station with fuel pipeline of Thappline (Thappline Pipeline Connecting Station) to ensure
uninterrupted fuel transportation. Land acquisition for the five booster pump stations and Thappline
Pipeline Connecting Station will cost around Baht 11 million.
The procurement cost of pipes and other equipment, construction cost, designing and
supervision fee, and other construction-related expenses is around Baht 7,401 million in total
(excluding land cost of Phichit Depot and Lampang Depot and construction cost of booster pump
stations and Thappline Pipeline Connecting Station). The construction of fuel pipeline system, fuel
depots, booster pump stations, and Thappline Pipeline Connecting Station will commence when the
Environmental Impact Assessment (EIA) report is proposed to and approved by the Office of Natural
Resources and Environmental Policy and Planning (ONEP), Ministry of Natural Resources and
Environment.
The project development period (including construction) is approximately 30 months (for
Phase 1) and 36 months (for Phase 2). The commercial operation dates for Phase 1 and Phase 2 are
expected to be around mid-2018 and early 2019, respectively.
Development plan of the North Pipeline Project
June 2015 September 2016 : Application for BOI

June 2015 September 2016 : Prepare Environmental Impact Assessment (EIA) report
March 2016 December 2016 : Procurement of fuel pipe and equipment (including production and transportation
period)
Quarter 1 2, 2016 : Apply for construction permit from the government agencies
Quarter 1 2, 2016 : Procure contractors to lay fuel pipeline and construction of fuel depot Phase 1
Quarter 2 3, 2016 : Procure contractors to lay fuel pipeline and construction of fuel depot Phase 2
Quarter 3, 2016 Quarter 1, 2018 : Construction of fuel depot Phase 1 (No EIA is required)
Quarter 3, 2016 Quarter 2, 2018 : Construction of fuel depot Phase 2 (No EIA is required)
Quarter 3, 2017 Quarter 2, 2018 : Construction of fuel pipeline system Phase 1

Quarter 1, 2018 Quarter 4, 2018 : Construction of fuel pipeline system Phase 2

Quarter 1, 2018 : Application for fuel pipeline transportation system and fuel depot business permit
Quarter 2, 2018 : Test run fuel pipeline transportation and fuel depot Phase 1
Mid of 2018 : Commercial operating fuel pipeline transportation system and fuel depot Phase 1
Quarter 4, 2018 : Test run of fuel pipeline transportation and fuel depot Phase 2
Beginning of 2019 : Commercial operation of fuel pipeline transportation system and fuel depot Phase 2
Background
On August 13, 2015, the National Energy Policy Committee (NEPC) No. 3/2015 resolved to
allow the existing operators or oil traders or other private enterprises to develop the Extension of
Fuel Pipeline Transportation System to Northern and Northeastern Regions Project to ensure free
competition with the support from the government agencies in leasing land along the highway at a
reasonable lease fee and for an appropriate period.
On September 30, 2015, the Cabinet acknowledged the aforementioned resolution of the NEPC.
On October 13, 2015, the Department of Energy Business (DOEB) submitted a letter No.
PhorNor. 0407/9766, stating that it had no objection to FPTs investment in the North Pipeline
Project by extending from FPTs existing fuel pipeline transportation system.
On December 9, 2015, the DOEB, under the Ministry of Energy, and FPT signed the MOU on
cooperation in the Extension of Fuel Pipeline Transportation System to Northern Region Project.
In this respect, the DOEB shall have duty to support FPT in seeking cooperation from the
concerned state agencies in laying of the fuel pipeline system, issue a license to FPT, and
provide suggestion, advice and opinion on the project implementation to be in line with the state
policy. Meanwhile, FPT shall be required to prepare an EIA report and duly obtain an approval
from Office of Natural Resources and Environmental Policy and Planning by September 2016,
obtain a fuel pipeline transportation and fuel depot license from DOEB by January 2017, complete
construction of the fuel pipeline transportation system and fuel depots by December 2018, and
conduct a test run and start commercial operation of the fuel pipeline transportation system and
fuel depots by January 2019.2
1.5 Details of the Assets Being Acquired

FPTs investment in the North Pipeline Project is expected to start after the Extraordinary
General Meeting of Shareholders of the Company, which will be held on February 24, 2016, has
approved the entering into this transaction and FPT has duly and completely fulfilled the conditions
precedent of the transaction.
Presently, FPT is a provider of multi-products pipeline transportation service and is able to
transport aviation fuel (Jet A-1) and ground products via underground single pipeline from the
receiving point at Bangchak and Chong Nonsi Depot to Don Muang Depot and Suvarnabhumi Depot
as well as ground products depot at Bang Pa-In, Phra Nakhon Si Ayutthaya Province.
To invest in the North Pipeline Project, FPT has to seek cooperation from relevant
government agencies, which are the Department of Highways and Department of Rural Roads, in
leasing land to lay fuel pipeline along the highways with a total distance of 585 kilometers. The
investment is divided into Phase 1: from Bang Pa-In Depot to Kamphaeng Phet Offtake Station with a
distance of 295 kilometers and from Kamphaeng Phet Offtake Station to Phichit Depot with a distance
of 70 kilometers, making up a total distance of 365 kilometers; and Phase 2: from Kamphaeng Phet
Booster Pump and Offtake Station to Lampang Depot with a distance of 220 kilometers. The two new
depots in Phichit and Lampang Provinces will be built as shown in the next charts.
Each of the newly built depots will receive ground products through the pipeline transportation
system from Bang Pa-In Depot for storing in a reserve fuel tank which has a capacity to store various
types of fuel totaling 70 million liters. It also has a pumping system and a loading meter system for a
fast and easy refueling of trucks. The refueling system is able to supply all types of fuel and for all
customers.
Both phases are currently at the designing stage. Contractor bidding will be launched in early
2016 and construction is expected to begin in mid-2016. With an approximate construction period of
30 months (for Phase 1) and 36 months (for Phase 2), the commercial operation dates for Phase 1
and Phase 2 are scheduled to be around mid-2018 and early 2019, respectively.
2
Under the 3-page MOU on cooperation in the Extension of Fuel Pipeline Transportation System to Northern Region Project
between DOEB and FPT, there is no clause regarding penalty fee in case that FPT cannot achieve milestones in the specified
timeline.

FPTs current fuel pipeline transportation system and the extension part to northern region
Lampang
Depot 220Km.
Phichit Depot
BoosterPumpandOfftake
StationinKamphaeng Phet 365Km. Saraburi
Depot
BangPaIn
Depot
PipelineConnecting
point Lamlukka
Donmuang Depot
Depot Dia.14
Suvarnabhumi
Depot
Chongnonsi Depot
OilRefineryofBangchak
PetroleumPCL. OilRefineryof
ThaiOilPCL.
Existing fuel pipeline and extension part to Northern Region

Existing FPTs fuel pipeline Maptaphut
Existing Thapplines fuel pipeline
RefineryPlant
Extension pipeline to Northern Region of FPT
The extension of fuel pipeline transportation system to northern region

and pipeline routes on the highways
220 Km.
Lampang Depot Highway No. 1
(Department of Highways)
Lampang
Lampang Depot 220 Km.
Highway No. 1
(Department of Highways) BoosterPumpStation
andOfftake
BoosterPump Kamphaeng Phet
Station Tak Highwaysinphase2fuelpipelineroute
Tak
Phichit
BoosterPumpand 365 Km.
Offtake Stationin Phichit Depot Phichit Depot Highway No. 115
Kamphaeng Phet (Depar tment of Highways)
Highway No. 112 70 Km.
Kamphaeng Phet (Department of Highways)
5Km. Highway No. 1
Nakorn Sawan
BoosterPump
Station (Department of Highways)
Nakorn Sawan Highway No. 122 101 Km.
(Depar tment of Highways)
34 Km. Highway No. 32
Booster Pump Singburi
Station (Department of Highways)
Singburi Highway No. 347 119 Km.
Booster (Depar tment of Highways)
Phase 1 fuel pipeline
Pump
Station
33 Km. Highway No. 3048
BangPaInDepot BangPa (Department of Rural Roads)
Phase 2 fuel pipeline In
BangPaInDepot 3 Km.
Ayutthaya Highwaysinphase1fuelpipelineroute

1.6 Total Value of the Acquired Assets and Basis for Determining the Value of
Consideration
Total investment in the North Pipeline Project is approximately Baht 7,759 million. The details
of investment are as follows:
1) Cost of land for constructing Phichit Depot, Lampang Depot, five booster pump stations, and a
Thappline Pipeline Connecting Station is approximately Baht 99 million. The sale and purchase
price of land was determined by the negotiation between FPT and the sellers and based on market
price in the nearby area.
2) Advisory fee is around Baht 466 million, composed of advisory fee for EIA study, advisory fee for
BOI promotion application, advisory fee for engineering study, design fee and project management
fee. Such fee was quoted by each advisor. The fee payment will be made in installments as
specified in the agreement.
3) Procurement cost of pipe, pump, valve and equipment, including device for SCADA (Supervisory
Control and Data Acquisition) system, is approximately Baht 2,329 million. Such cost was quoted
by the sellers of pipe and equipment. FPT will import pipe and related equipment from abroad. The
payment will be made when pipe and equipment are delivered.
4) The turn-key construction cost of pipeline system, fuel depot and booster pump station is about
Baht 4,159 million. The construction cost is estimated by an engineering study advisor who has
experience in designing and construction of high speed diesel (HSD) storage and water tank for
fire extinguisher and related system to FPT at Don Muang Depot. The payment for construction
cost will be made in installments against project progress. However, at present the contractor for
this project has not been chosen yet.
5) Miscellaneous expenses are about Baht 447 million, including right of way clearing and access
road expenses around Baht 50 million, transportation expenses of Baht 68 million, pipeline internal
inspection with Intelligent PIG3 of Baht 50 million, insurance expenses of Baht 30 million, and
contingency expenses of Baht 249 million. Such expenses are estimated by FPT.
6) 30-year land lease payment to the Department of Highways and Department of Rural Roads to lay
the fuel pipeline is about Baht 259 million. The lease fee is based on the rate specified in
ministerial regulation, issued by virtue of Section 42, paragraph 2, of the Highway Act B.E. 2535
which was amended by the Highway Act (No. 2) B.E. 2549. Based on Section 56, paragraph 3, of
the Highway Act B.E. 2535 which was amended by the Highway Act (No. 2) B.E. 2549, the lessee
shall make lease fee payment within 30 days from the date of receiving the letter of lease fee
notification. The lease fee payment will be made on a yearly basis and the lease fee will be
increased by 15% every five years.
1.7 Calculation of Transaction Size

FPTs investment in the North Pipeline Project of around Baht 7,759 million is considered as
an asset acquisition transaction. The highest transaction size, on a total value of consideration basis,
is equal to 93.18% of total assets of the Company and its subsidiaries as of September 30, 2015. The
transaction is therefore deemed as an acquisition of asset, type 1, with transaction value equal to or
higher than 50% but lower than 100%.
Calculation Criteria Calculation Transaction Size
1. Net tangible assets (NTA) Not applicable because this is not an acquisition of securities N/A
2. Net operational profit Not applicable because the Project has not yet generated any N/A
operational profit
1/ 2/
3. Total value of consideration Baht 7,759 million / Baht 8,326.71 million 93.18%
4. Value of issued securities of the Not applicable because there is no issuance of securities N/A
listed company in consideration of
the acquisition of assets
Highest transaction size 93.18%
Remark:
1/ Details of investment are as follows:
Cost of land for construction of fuel depots and booster pump stations 99 Baht million
Advisory fee 466 Baht million
Procurement cost of pipe, pump and valve 2,329 Baht million
Construction cost 4,159 Baht million
Miscellaneous expense 447 Baht million
Total 7,500 Baht million
30-year land lease payment to lay the fuel pipeline 259 Baht million
Grand total 7,759 Baht million
3
Pipeline internal inspection with Intelligent PIG (Pipeline Inspection Gauge) is done by inserting the device into the pipeline.
Intelligent PIG is capable of traveling through the pipeline for inspection and data recording and analysis and accurately pre-
gauging the specific point of potential damage that will need a repair.

2/ Total assets of the Company and its subsidiaries derived from the reviewed consolidated financial statements as at
September 30, 2015
After aggregating such transaction with asset acquisition transactions of the Company
occurring in the previous six months consisting of the Companys annual investment budget of 2016
which was approved by the Board of Directors Meeting of the Company No. 4/2015 held on
November 5, 2015 amounting to Baht 123.03 million and the subsidiaries annual investment budget
of 2016 which was approved by the board of directors meeting of each subsidiary in November 2015
totaling Baht 94.29 million (consisting of Fuel Pipeline Transportation Ltd. amounting to Baht 78.00
million and Thai Aviation Refuelling Co., Ltd. amounting to Baht 16.29 million), making up a total
annual investment budget of 2016 of Baht 217.32 million or equivalent to transaction size of 2.61%,
the total size of such asset acquisition transactions is 95.79% of total assets of the Company and its
subsidiaries as of September 30, 2015.
acquisition transaction to the SET and obtain an approval from the shareholders meeting with a vote
of not less than three-fourths of total voting rights of shareholders who attend the meeting and are
eligible to vote, excluding the votes of shareholders with a conflict of interest (in this case, none of the
shareholders has a conflict of interest in the transaction).
1.8 Sources of Funds

Total investment cost of the North Pipeline Project is approximately Baht 7,500 million
(excluding 30-year land lease fee to be gradually paid on a yearly basis), consisting of cost of land for
building depots and booster pump stations, advisory fee, procurement cost of pipe, pump and valve,
construction cost of fuel pipeline system, depots and booster pump stations, and other related
expenses. Sources of funds will come from rights offering of FPT amounting to approximately Baht
3,400 million4 and loans from financial institutions. FPT plans to borrow from financial institutions total
loans of Baht 4,600 million, divided into Baht 4,100 million for financing project construction and Baht
500 million for paying interest expense during construction period. Currently, FPT is in the negotiating
process with the financial institutions.
Sources of funds for yearly land lease fee to be paid to Department of Highways and
Department of Rural Roads for 30 years of approximately Baht 259 million will come from cash flow
from operation and working capital of FPT.
The Companys sources of funds for the rights offering of FPT in proportion to the
shareholding percentage of the Company in FPT5 amounting to around Baht 2,550 million will come
from partial proceeds from sale of FPTs shares of approximately Baht 300 million, and the remaining
Baht 2,250 million will come from loans from financial institutions. Currently, the Indicative Term Sheet
has been obtained, and it is under negotiation process with the financial institutions.
1.9 Conditions for the Transaction

The land lease agreement, the implementation of the North Pipeline Project and the
construction of fuel depots in Phichit and Lampang Provinces are contingent upon a prior approval
from the Extraordinary General Meeting of Shareholders of the Company and FPT. Moreover, FPT
must comply with the related laws. The Department of Energy Business will take part in consideration
of the details of the project. FPT must implement the operating plan as follows:
a) Prepare the EIA report and seek an approval from the Office of Natural Resources and
Environmental Policy and Planning (ONEP), Ministry of Natural Resources and
Environment.
b) Design the pipeline routes, the fuel pipeline transportation system and the fuel depots.
c) Apply for a fuel pipeline transportation and fuel depot license for the fuel pipeline
transportation to northern region with the Department of Energy Business, Ministry of
Energy, pursuant to regulation of control business type 3 in accordance with the Fuel
Control Act B.E. 2542.
d) Build a fuel pipeline transportation system and fuel depots.
4
According to Clause 6 regarding future capital increase of FPT in the Memorandum of Agreement to purchase FPTs shares
between the Company and Bangkok Airways PCL. and PTG Energy PCL., Bangkok Airways PCL. and PTG Energy PCL.
agree to subscribe Baht 3,400 million Rights Offering of FPT in proportion to their shareholding.
In addition, other major FPTs shareholders also replied questionnaires on the preliminary interest to support FPTs
capital increase plan. For example; Bangkok Insurance PCL. intends to subscribe the Rights Offering of FPT in proportion to its
shareholding, and Bangchak Petroleum PCL. is also interested in the North Pipeline Project and it is now under studying
process of FPTs capital increase.
5
Please see Footnote 1.

e) Conduct a test run and commercially operate the fuel pipeline transportation system and
fuel depots.
2. Profile of Bangkok Aviation Fuel Services PCL. Please find the details in Section 5 of the
Information Memorandum concerning Asset Acquisition of the Company, which is enclosed with
the Notice of the Shareholders Meeting.
3. Profile of Fuel Pipeline Transportation Limited Please find the details in Attachment 1
appended to this IFA opinion report.

Part 2: Opinion of the Independent Financial Advisor on Reasonableness of the Asset

Acquisition Transaction
The IFA has determined reasonableness of the entering into the transaction based on the
following key factors:
1. Objective and Necessity of the Transaction
Since FPT started the fuel pipeline transportation business in 1994 till now, FTP has only
Bangchak - Don Muang - Bang Pa-in pipeline and Makkasan - Suvarnabhumi Airport pipeline. The
opportunity for FPT to substantially grow in revenue and profit is limited unless the new pipeline
project is built. In addition, the opportunity that the National Energy Policy Committee and the
Cabinet approve extension of fuel pipeline systems does not occur often. The investment in the North
Pipeline Project will enable FPT to achieve solid and sustainable growth in its business performance
in the future and help to expand its existing business. FPT is well-prepared in all respects, including
its more than 20 years of experience in fuel pipeline system operation, knowledge and skill of its
management team and project engineers, and investment viability of the project. BAFS, as the parent
company and major shareholder of FPT, will benefit from recognition of a growing performance of
FPT from the investment in this project which will generate long-term returns for the Company in the
form of dividend income, thus relatively providing the Companys shareholders with a favorable rate of
return in the long run.
Apart from generating benefits to FPT and the Company, the North Pipeline Project
corresponds with the Ministry of Energys policy to promote the extension of fuel pipeline
transportation system to the northern and northeastern regions so as to gear up for growth in fuel
consumption in such areas. It will enhance the energy stability of the country with the more extensive
fuel pipeline routes and also increase fuel transportation efficiency by developing basic infrastructure
for fuel transportation to the provincial area. The country will have a greater fuel reserve system. The
system can be connected to the fuel depot which is the strategic military point. Moreover, it helps
promote the free trade policy by allowing all fuel traders to access the service at an equal tariff rate
and, thus, to remain competitive with road and rail fuel transport system. It also helps preserve
environment and natural resources of the country and reduce road accidents. Last but not least, it
helps support the expansion of fuel consumption in ASEAN region and accordingly helps enhance the
countrys competitiveness in its move towards becoming the regional energy hub. The system can be
connected to the markets in the neighboring countries in the future. The pipeline system will enable
direct fuel transportation from refineries to all regions, thus likely leading to growth in fuel
transportation via the pipeline system.
For the public, this project ensures the sufficiency of fuel because the pipeline system is safe
and stable. Those who live in the northern region are able to use the fuel at a lower price than current
price and at nearly the same rate as Bangkok due to a cheaper cost of fuel transportation by the
pipeline system than by the road or rail transport system. This can ensure fairness of fuel price in
regional development and lead to an equal ex-depot price in all regions, thus reducing rural price
inequality.
2. Comparison of Advantages and Disadvantages of Entering into the Transaction

2.1 Advantages and Benefits of the Transaction
(1) Growth in income and improve operating performance of FPT and the Company
Based on the IFAs study, the North Pipeline Project of FPT demonstrates investment
viability, with its net present value (NPV) of free cash flow estimated in a range of Baht 203.04 -
440.58 million. The projects internal rate of return (IRR) is expected at about 9.38% 9.63% per
annum and payback period at approximately 14.13 14.41 years (please see more details in Part 3 of
this report). Therefore, after the projects commercial operation date around mid-2018, FPT will be
able to grow its operational income and net profit and the Company, as its major shareholder, will
then benefit from a consolidation of FPTs performance pro rata with the Companys shareholding
percentage in FPT. Moreover, the Company will receive return from such investment in the form of
dividend which will grow solidly and continuously, thus posing a favorable impact on the Company
and its shareholders in the long term.
(2) Privileges from investment promotion
The North Pipeline Project qualifies for receiving investment incentives under the investment
promotion law from the Board of Investment (BOI) in the category of Service and Public Utilities,
subcategory of Pipeline Transportation Service. FPT is preparing to apply for a BOI promotion
certificate and will lodge the application after the projects construction plan and operational plan have
been completely mapped out, expected to be around the fourth quarter of 2016. The incentives will

include exemption from corporate income tax during the first eight years from the start of income
earning, use of tax loss (if any) incurred during the promotion period to deduct net profit generated for
a period of not exceeding five years after the income tax exemption period, and exclusion of dividend
received from the promoted activities from taxable income calculation throughout the income tax
exemption period. By obtaining the BOI promotion, the project will be able to generate a higher net
profit and make a higher rate of dividend payment than in the case of non-BOI promotion and the
Company will accordingly receive a greater return from investment.
(3) No control dilution or earnings dilution effect on the Companys shareholders due to the
investment in the Project
Total investment cost of the North Pipeline Project (excluding 30-year land lease fee which
will be gradually paid on a yearly basis) is not exceeding Baht 7,500 million. Sources of funds will
come from rights offering of FPT amounting to approximately Baht 3,400 million and loans from
financial institutions of about Baht 4,100 million. Currently, FPT is in the negotiating process with the
financial institutions. The Company, as FPTs shareholder holding 75% of FPTs paid-up shares, will
apply for loans from financial institutions in the amount of Baht 2,250 million as a source of funds to
subscribe for the newly issued shares of FPT in order to retain its shareholding percentage in FPT. To
raise funds by borrowing from financial institutions instead of issuance of new shares will be beneficial
to the Companys existing shareholders in that they will not be faced with any effect from control
dilution and earnings dilutions.
(4) An opportunity for FPT to further launch the Fuel Pipeline Transportation System Phase 3
to Myanmar
FPT management expects that the investment in the North Pipeline Project will help further
expand FPTs investment in the future. That is, FPT will likely consider investing in an extension of the
Fuel Pipeline Transportation System Phase 3 from Lampang Province to Mae Sai District of Chiang
Rai Province with a distance of more than 300 kilometers by building a depot at Mae Sai District for
fuel transportation to Tachileik Province in Myanmar, which will require an additional investment of
Baht 3.5 - 4 billion. Such Phase 3 investment will be launched after completion of Phase 1 and Phase
2 of the North Pipeline Project and is justified by the yearly robust growth in Myanmars fuel demand
as fueled by its ongoing economic expansion. Hence, the combined investment cost of all three
phases of the project will be approximately Baht 11.5 billion, covering a total length of the fuel pipeline
of about 870 kilometers.
(5) An opportunity for FPT to extend its fuel pipeline transportation service to airports in the
northern region
The investment in this project will provide an opportunity for FPT to extend its fuel pipeline
transportation service to airports in the northern region. Given that number of aircraft passengers to
the north grows in the future with an increase in air traffic volume, this may prompt FPT to launch a
transport of aviation fuel (Jet A-1) via underground pipeline to fuel depots at northern airports in
replacement of the existing system under which all air carriers need to store reserve fuel upon both
their departure from and arrival in Bangkok.
(6) The project helping to enhance the countrys fuel transportation efficiency
This project is an investment in construction of the countrys infrastructure system in line with
the Ministry of Energys policy to make available a fuel pipeline system with a view to enhancing the
countrys fuel transportation efficiency, responding to growth in fuel demand, strengthening the
countrys energy security, and providing a reliable energy infrastructure that includes the use of
pipeline transportation to fuel depots. In the future, it is likely that military fuel depots will be
constructed in the northern region to reinforce the countrys energy security and military security,
thereby leading to utilization of the fuel pipeline to support the countrys strategic fuel storage. The
project will help ensure the availability of fuel since the pipeline system is safe and stable. Compared
with other transportation methods, the fuel pipeline system is most appropriate as it is the fastest
method of fuel transportation and takes the shortest time. A single pipeline can transport various
types of fuel such as benzene 95, benzene 91 and diesel. Therefore, the project will significantly
generate economic benefits to the country and will contribute to the policy on nationwide equal pricing
of fuel pipeline transportation to depots. This will not only enable the public to save their fuel expense
due to the lower cost of fuel transportation by the pipeline system than by the rail or truck system, but
also enable consumers in the central and northern regions to utilize fuel at nearly the same rate as
Bangkok. Moreover, the project will contribute to the policy on finished oil storage in provincial depots
to enhance the countrys energy security and competitiveness in its move towards becoming the
regional energy hub as well as gear up for the implementation of AEC.

(7) The project providing benefits for the private sector and the business sector
The project will provide benefits for the private sector by ensuring the sufficiency of fuel
because the pipeline system is safe and stable. Those who live in the northern region are able to
utilize the fuel at the lower price than current price and at nearly the same rate as Bangkok. It will also
help reduce road congestion and accidents caused by large fuel trucks and improve environment by
reducing pollution created by fuel transportation via the road and rail systems. For the business
sector, this project will enable pipeline users to access the service at the same rate and remain
competitive with the road and rail fuel transportation system.
(8) The project helping to reduce road accidents and preserve environment
The fuel pipeline transportation is safer than fuel delivery by large trucks which face the
possibility of road accidents. Given that oil trades increasingly use services under the North Pipeline
Project in the future, the volume of fuel transportation by large fuel trucks will decline, thus helping to
reduce road accident and road surface wear, save the countrys budget for road repair, reduce carbon
dioxide emissions from fuel trucks, preserve environment, and decrease greenhouse gas emissions.
Besides, the project will have an opportunity to generate more income from sales of carbon credits
since it will help reduce greenhouse gas emissions by around 30,000 tons of carbon dioxide
equivalent per year.
2.2 Disadvantages and Risks of the Transaction

(1) FPT and the Company will have higher debts and D/E ratio.
In entering into this transaction, FPT will use sources of funds derived from loans from
financial institutions of approximately Baht 4,600 million and from rights offering to its existing
shareholders for investment in the North Pipeline Project. Likewise, the Company will apply for loans
from financial institutions of Baht 2,250 million as a source of funds for the subscription for FPT
shares under the rights offering. As a result, the investment in this project will lead FPT and the
Company (according to the separate and the consolidated financial statements) to incur higher debts
and finance costs and, hence, a higher D/E ratio.
Based on its consolidated financial statements as of September 30, 2015, the Company had
total liabilities of Baht 2,767.54 million, shareholders equity of Baht 5,559.17 million and D/E ratio of
0.50 time. Given that FPT and the Company fully draw down the loans of Baht 6,850 million, the D/E
ratio will edge up to the highest around 1 time in 2018 and will thereafter gradually decline in tandem
with the loan repayment.6 However, such increase in the D/E ratio does not exceed the financial
covenants specified in the three long-term loan agreements of the Company which limit the D/E ratio
at not over 1.50, 2.00 and 2.25 times respectively.
As for FPT, it had total liabilities of Baht 1,048.41 million, shareholders equity of Baht 987.05
million and D/E ratio of 1.06 times as of September 30, 2015. In case FPT draws down the total loans
of Baht 4,600 million and can completely raise Baht 3,400 million from its rights offering, its total
liabilities will increase to Baht 5,648.41 million and shareholders equity to Baht 4,367.05 million and
its D/E ratio will rise to the highest around 1.35 times in 2018 and will gradually decline in line with the
loan repayment.7 However, such increase in the D/E ratio does not exceed the financial covenants
specified in the long-term loan agreement of FPT which limits the D/E ratio at not over 3 times from
2015 onwards.
(2) In the event that the Companys shareholders meeting does not approve the asset
acquisition transaction, FPT and the Company (in the consolidated financial statements) must record
the project expenses already paid by FPT.
Prior to the date of the shareholders meeting to approve this asset acquisition transaction,
FPT has engaged independent advisors for an engineering study, BOI promotion application and EIA
study, and has thus far paid and recorded the advisory fee as investment cost in an amount of about
Baht 11.17 million. Given that the Companys shareholders meeting does not approve the asset
acquisition transaction, FPT must record the project expenses already paid out. There is also the
financial advisory fee and legal counseling fee for preparation of documents relevant to the seeking of
approval for this transaction.
6
The calculation was based on the assumption that the loans raised by FPT will be gradually drawn down according to its
investment plan, the Company and its subsidiaries will generate a yearly net profit, which is estimated from the annualized
9M/2015 net profit, the performance of this Project to be invested by FPT is included, the existing loans are gradually repaid,
the Company makes dividend payment under its policy at not less than 50% of net profit, inclusive of the Companys gain from
sale of FPT shares at 16.55% of FPTs paid-up capital on January 19, 2016.
7
The calculation was based on the assumption that the loans raised by FPT will be gradually drawn down according to its
investment plan, FPT will generate a yearly net profit, which is estimated from the annualized 9M/2015 net profit, the
performance of this Project to be invested by FPT is included, the existing loans are gradually repaid, and FPT can completely
raise Baht 3,400 million from the rights offering.

As regards the land already purchased by FPT for constructing Phichit and Lampang Depots
in a total amount of Baht 81.21 million, should the Companys shareholders meeting disapprove this
asset acquisition transaction, FPT will then have to utilize the land for other purposes.
Nonetheless, FPT and the Company believe that the investment in this project is beneficial to
them as they will recognize a favorable performance from the project. Moreover, the project will help
further expand their existing business. It will also be beneficial to the country by helping enhance
energy security and will provide benefits to the business sector and the public by enabling them to
utilize fuel at a lower price than current price and at nearly the same rate as Bangkok and helping
reduce road congestion and accidents caused by large fuel trucks and improve environment through
reduction of pollution created by road and rail fuel transportation systems.
(3) Risk of the Project does not perform as expected.
If the North Pipeline Project does not perform as expected, which may be due to factors such
as quantity of fuel transported via the pipeline, number of users, pipeline tariff rate, etc., it could then
affect the projects IRR.
(4) Risk involved with the regulatory bodys control over pipeline tariff in the future.
At the present, there is no government agency responsible for oversight service fees for
transportation of fuel via fuel pipeline systems. However, the meeting of the National Energy Policy
Council (NEPC) held on December 22, 2015 has assigned the Energy Policy Management
Committee (EPMC) to be responsible for overseeing the service fees for transportation of fuel via
fuel pipeline systems in order to prevent market dominance and monopoly and to provide protection
for oil traders and the public to access and receive the services at the fair prices and treatments, until
the Energy Regulatory Commission (ERC) has completed the imposition, updating or amendment of
the laws/regulations concerning the fuel pipeline transportation systems. If the government sector
revises or controls the tariff rate, it could hinder FPTs profitability.
However, the market mechanism of fuel prices will enable the pipeline tariff to remain
competitive with the fuel truck tariff. An overly high pipeline tariff will not motivate oil traders to use the
pipeline system and they will instead return to the truck transportation system. It is somewhat unlikely
that the government sector will control the pipeline tariff to the extent that could weaken fuel pipeline
operators competitiveness because this will not correspond with the Ministry of Energys policy to
make available a fuel pipeline system with a view to enhancing the countrys fuel transportation
efficiency, responding to growth in fuel demand, and strengthening the countrys energy security.
(5) Risk associated with a success in negotiation about fuel pipeline connection with Thai
Petroleum Pipeline Co., Ltd.
Currently, FPT is in the negotiating process to connect its fuel pipeline with the pipeline of
Thai Petroleum Pipeline Co., Ltd. (Thappline) at Chiangrak Noi railway station, Phra Nakhon Si
Ayutthaya Province, in order to link the pipeline to the booster pump station at Bang Pa-In Depot with
a distance of about 4 kilometers. The pipeline connection with Thappline will allow for the entire
pipeline network to transport fuel from all refineries, including Esso, Shell, Caltex, PTT, etc. in a bid to
prevent fuel shortage and cope with fuel transportation problem at any pipeline as well as reduce
duplication in investments. As such, failure by FPT to connect its fuel pipeline with Thapplines
pipeline could lead its IRR to fail to meet the projection.
FPT believes that this project corresponds with Ministry of Energys policy and helps to
enhance the countrys energy security. In view of this, coupled with FPTs competitive pipeline tariff
compared to the large truck tariff rate, Thappline will also benefit from the fuel pipeline connection
with FPT. It is thus expected that there will be no problem in the negotiation about fuel pipeline
connection with Thappline.
(6) Risk involved with application for a fuel depot construction permit from Tambon Mae Kua
Administration Organization, Sop Prap District, Lampang Province.
FPT is in the process of applying for a fuel depot construction permit from Tambon Mae Kua
Administration Organization, Sop Prap District, Lampang Province. Therefore, the project is still
exposed to risk associated with the construction of Lampang Depot, while the construction permit for
Phichit Depot has already been obtained. However, FPT expects no problem in obtaining the
construction permit for Lampang Depot considering that the project will contribute to job creation for
local people and will not cause any environmental impacts on them.
(7) Risk involved with approval from the Office of Natural Resources and Environmental
Policy and Planning (ONEP), Ministry of Natural Resources and Environment, and application for
business license type 3 from the Ministry of Energy.
The North Pipeline Project is subject to the EIA study according to the Ministry of Natural
Resources and Environments notification. FPT has engaged an environmental advisor to conduct the
study. It is currently in the process of issuing the EIA report and conducting a public hearing. The EIA

report will be submitted to ONEP and the competent officer by the first quarter of 2016 and is
expected to be approved by September 2016. If FPT fails to obtain the EIA approval, it will be unable
to submit the construction permit application since the application must be accompanied by the EIA
report, thereby likely resulting in failure to implement the project as planned.
However, FPT believes that the projects EIA will be approved because it can determine the
method of construction and prevention of environmental impacts. Besides, FPT has coordinated with
the Ministry of Energy in the processing of EIA. It accordingly believes that it will obtain the approval
from the concerned authority and, thus, be able to start commercial operation as scheduled.
(8) Risk associated with acquisition of the required land area at the desired price for
constructing five booster pump stations and Thappline Pipeline Connecting Station.
In this project construction, FPT has to acquire land for building five booster pump stations in
Singburi, Nakhon Sawan, Kamphaeng Phet, Tak and Lampang Provinces and Thappline Pipeline
Connecting Station which will be between Lam Luk Ka District of Pathum Thani Province and
Chiangrak Noi District of Phra Nakhon Si Ayutthaya Province in order to link the pipeline to the
booster pump station at Bang Pa-In Depot with a distance of about 4 kilometers. FPT is in the process
of land acquisition. If it fails to acquire the desired plots of land as specified in the plan or the
negotiated acquisition price is too expensive, FPT may have to change the locations of the booster
pump stations or Thappline Pipeline Connecting Station, which will lead to a higher construction cost.
However, FPT believes that in the negotiation for land purchase in each area it will be able to acquire
the land within the designated budget because the land is of a small size and FPT could earlier
acquire land for Phichit and Lampang Depots at a price lower the established budget. After all, FPT
has adequately provided a contingency cost in the construction budget.
(9) Risk of foreign exchange fluctuation.
In the project construction, FPT has to import pipe, pump, valve and other equipment from
abroad. Therefore, a weakening of the baht against other currencies may put FPT at risk from foreign
exchange. However, FPT will consider hedging against foreign exchange risk through a forward
contract and has adequately provided a contingency cost in the construction budget.
(10) Risk in obtaining loans for FPTs project investment and for BAFSs investment in newly
issued shares of FPT.
Due to the huge investment cost, the project requires financial support from financial
institutions as sources of funds for project implementation. According to the plan, funding for FPTs
project construction will come from its rights offering of about Baht 3,400 million, of which Baht 2,550
million will be derived from share subscription by the Company, as FPTs major shareholder. To fund
such share subscription, the Company will seek loans from financial institutions in an amount of Baht
2,250 million. The remaining Baht 4,600 million will be raised by FPT from borrowing from financial
institutions for the project investment. Currently, FPT and the Company are in the negotiating process
with the financial institutions.
Failure by FPT and the Company to obtain the loans will put the project at risk involved with
seeking of loans, which may affect the project construction plan. However, as both FPT and the
Company have a sound financial position with strong cash flow, it is believed that they will succeed in
the negotiation and application for loans from financial institutions.
(11) Risk associated with an increase of pipeline land lease fees by the Department of
Highways, Department of Rural Roads and Royal Irrigation Department.
The North Pipeline Project will be constructed along the highways, which are owned by the
Department of Highways and Department of Rural Roads, and also along the waterways, ditches and
canals, which belong to the Royal Irrigation Department (depending on the area that the pipeline
passes through). Effective as from September 14, 2001, the Department of Highways has determined
the yearly land lease fee based on the area used for laying the pipeline along the highways and the
land price as appraised by the Department of Lands, with a subsequent increase of 15% every five
years of lease. Such land lease fee has been applicable for a long period of time. As for the areas
owned by the Royal Irrigation Department, no lease fee has been imposed. Accordingly, in case the
Department of Highways and Royal Irrigation Department revise up their lease fees, the project will
bear a higher land lease fee to the extent that may weaken its competitiveness with the large fuel
truck transportation system, which will thereby affect FPT. However, FPT is confident that the Ministry
of Energy, by the DOEB, will support and enable investors to operate the project and compete in this
business due to the capital-intensive nature of the project and the long payback period.

(12) Risk incidental to management of communities that the fuel pipeline passes through and
communities in the area of Phichit and Lampang Depots.
The North Pipeline Project could be exposed to risk involved with management of
communities that the fuel pipeline passes through or communities in the area of Phichit and Lampang
Depots. Being aware of this risk, FPT has conducted a study on communities around the project
before drawing up the construction plan so as to safeguard against any possible future impacts on the
communities and other areas that the pipeline passes through. For instance, the location of Lampang
Depot is in Sop Prap District of Lampang Province which had been studied and recommended by
Chulalongkorn University to the Ministry of Energy. In addition, FPT has prepared to coordinate with
the concerned state agencies and already devised a plan for community management, as well as set
aside a contingency cost for this purpose.
(13) Risk of technological changes.
If in the future the technological advancement leads to emergence of other alternative energy
that can substitute for fuel, there may be a growing use of non-petrol powered vehicles such as
electric vehicles, hydrogen-powered vehicles, etc., thus likely resulting in a drop in fuel consumption
in the northern region. However, such technology is still in the process of development, experiment
and efficiency testing, and its widespread commercial use remains unclear. Besides, it will not be
widely affordable in Thailand whose per capita income remains at a low level and where petrol-driven
vehicles are still essential in daily life.
3. Conclusion of the Independent Financial Advisors Opinion on Reasonableness of the

Transaction
The North Pipeline Project will enable FPT to achieve solid and sustainable growth in its
business performance in the future and help to expand its existing business. BAFS, as the parent
company and the major shareholder of FPT, will benefit from recognition of a growing performance of
FPT from the investment in this project which will generate long-term returns for the Company in the
form of dividend income, thus relatively providing the Companys shareholders with a favorable rate of
return in the long run.
The project corresponds with the Ministry of Energys policy to promote the extension of fuel
pipeline transportation system to the northern and northeastern regions so as to gear up for growth in
fuel consumption in such areas. It will enhance the energy stability of the country and also increase
fuel transportation efficiency by developing basic infrastructure for fuel transportation to the provincial
area. Moreover, it helps promote the free trade policy by allowing all fuel traders to access the service
at an equal tariff rate and, thus, to remain competitive with road and rail fuel transport. It also helps
preserve environment and reduce road accidents. Last but not least, it helps support the expansion of
fuel consumption in ASEAN region and accordingly helps enhance the countrys competitiveness in
its move towards becoming the regional energy hub and prepare for the entering into ASEAN
Economic Community or AEC.
The benefits that the Company will obtain from entering into this transaction are (1) growth in
income and improve operating performance of FPT and the Company; (2) privileges from investment
promotion; (3) no control dilution or earnings dilution effect on the Companys shareholders due to the
investment in the Project; (4) an opportunity for FPT to extend the Fuel Pipeline Transportation
System Phase 3 to Myanmar; (5) an opportunity for FPT to extend its fuel pipeline transportation
service to airports in the northern region; (6) the project helping to enhance the countrys fuel
transportation efficiency; (7) the project providing benefits for the private sector and the business
sector; and (8) the project helping to reduce road accidents and preserve environment.
However, there are some disadvantages and risks from entering into the transaction as
follows: (1) FPT and the Company will have higher debts and D/E ratio; (2) In the event that the
Companys shareholders meeting does not approve the asset acquisition transaction, FPT and the
Company (in the consolidated financial statements) must record the project expenses already paid by
FPT; (3) Risk of the Project does not perform as expected; (4) Risk involved with the regulatory
bodys control over pipeline tariff in the future; (5) Risk associated with a success in negotiation about
fuel pipeline connection with Thai Petroleum Pipeline Co., Ltd.; (6) Risk involved with application for a
fuel depot construction permit from Tambon Mae Kua Administration Organization, Sop Prap District,
Lampang Province; (7) Risk involved with approval from the Office of Natural Resources and
Environmental Policy and Planning (ONEP), Ministry of Natural Resources and Environment, and
application for business license type 3 from the Ministry of Energy; (8) Risk associated with
acquisition of the required land area at the desired price for constructing five booster pump stations
and Thappline Pipeline Connecting Station; (9) Risk of foreign exchange fluctuation; (10) Risk in

obtaining loans for FPTs project investment and for BAFSs investment in newly issued shares of
FPT; (11) Risk associated with an increase of pipeline land lease fees by the Department of
Highways, Department of Rural Roads and Royal Irrigation Department; (12) Risk incidental to
management of communities that the fuel pipeline passes through and communities in the area of
Phichit and Lampang Depots; and (13) Risk of technological changes.
In view of the objectives and necessity of the transaction, coupled with strengths,
weaknesses, benefits and risks involved, the IFA is of the opinion that the transaction will enable the
Company and FPT to gain more benefits and business opportunities with an acceptable level of
business risks, and will be substantially beneficial to the country and the public. Therefore, the
entering into the asset acquisition transaction is deemed reasonable.

Part 3: Opinion of the Independent Financial Advisor on the Appropriateness of the

Acquisition Price and Conditions of the Acquiring Assets
Fuel Pipeline Transportation Limited (FPT), a subsidiary of the Company, has planned an
investment in the Extension of Fuel Pipeline Transportation System to Northern Region (the Project
or the North Pipeline Project). The investment will be divided into 2 phases; Phase 1: Bang Pa-In
Phichit (365 Km.) and Phase 2: Kamphaeng Phet Lampang (220 Km.) with the fuel depots in Phichit
and Lampang.
CapAd has considered the appropriateness of the investment value of the North Pipeline
Project by constructing the financial forecast of the Project by taking into account the future cash
flows of the Project (Free Cash Flow: FCF) and calculated;
(1) Internal rate of return (IRR) of the Project,
(2) Net present value (NPV) of the Project by using the weighted average cost of capital
(WACC) of the Company as a discount rate, and
(3) Payback period of the Project
CapAd evaluated the appropriateness of the investment value of North Pipeline Project by
using information obtained from the Company and FPT, interviews with managements of the
Company and FPT, and other publicly-disclosed information, such as Form 56-1, audited and
reviewed financial statements, and industry information obtained from www.doeb.go.th, financial
information from various websites, and information from the SECs website (www.sec.or.th), and the
SETs website (www.set.or.th). However, CapAd has rendered its opinion based mainly on the truth
and completeness of those information and documents at present. Therefore, any change of such
information may significantly affect business operation of the Company and FPT, this transaction and
CapAd s opinion on this transaction as well as the shareholders decision.
To support the consideration for entering into the transaction, the IFA prepared the financial
forecast based on the projection prepared by the management of FPT and the financial advisor of
FPT and adjusted certain assumptions so as to reflect overall market conditions and current economic
situation as well as to be in accordance with conservative basis. With this regard, the IFA has
prepared the financial forecast over 30 years from 2016 2045, to be in line with the land lease
agreement with the Department of Highways.
The key assumptions for the feasibility study of the North Pipeline Project are presented as
follows:
Details of Phase 1 and Phase 2 are as follows;
Phase 1 Phase 2
Bang Pa-In Phichit Kamphaeng Phet Lampang
Distance 365 Km. 220 Km.
Delivery Capacity of Pipeline 9,000 million liters/year 5,000 million liters/year
Storage Capacity 70 million liters 70 million liters
COD Q3/2018 Q3/20191/
Remark: 1/ The commercial operating date will be later than the information mentioned in Part 2 Clause 1.4 of this report
(Reference to the Information Memorandum of the Company), based on conservative basis.
1) Revenues from Services

Major revenues of the North Pipeline Project will derive from (1) revenues from transportation
services through underground petroleum pipeline system, and (2) storage handling charges at Phichit
Depot and Lampang Depot.
The revenues from transportation services

The fuel pipeline networks of the North Pipeline Project will connect with the existing fuel
pipeline system of FPT at Amphor Bang Pa-In, Phra Nakhon Si Ayutthaya Province and with those of
Thappline at Chiangrak Noi Station (Thappline Pipeline Connecting Station). Given the connection
with both fuel pipeline systems, the North Pipeline Project will be able to support petroleum products
shipped from Bangchak Depot, Shell Depot and Chevron Depot via the existing pipeline system of
FPT, and shipped by shippers from eastern of Thailand (such as Thai Oil PCL.s Depot, PTT Depot,
Esso Depot, Shell Depot and Caltex Depot.) via Thapplines fuel pipeline system, and distribute to gas
stations and industry users in the Northern of Thailand. The expected customers of the North
Pipeline Project will be above-mentioned oil companies, which are the current customers of FPT and
Thappline.

Throughput Fees
FPT has estimated service fees for Phase 1 of the North Pipeline Project at Baht 0.21 per
liter, and Phase 2 at Baht 0.44 per liter, which are the competitive fees comparing with other
transportation means. Summary of comparison are as follows;
Transportation Phichit Depot Lampang Depot
Truck Baht 0.55 per liter Baht 0.82 per liter
Thappline + Truck Baht 0.68 per liter Baht 0.94 per liter
Thappline + Rail Baht 0.71 per liter Baht 0.86 per liter
1/ 2/
Thappline + FPT North Pipeline Baht 0.51 per liter Baht 0.77 per liter
Exiting FPT + FPT North Pipeline Baht 0.60 per liter Baht 0.85 per liter
Remark:
1/ Consisted of service fee through Thappline at Baht 0.25 per liter, service fee through FPT North Pipeline at Baht 0.21 per
liter, and transportation expenses by truck at Baht 0.05 per liter. (Based on the diesel price around Baht 23 per liter, as of
December 2015).
2/ Consisted of service fee through Thappline at Baht 0.25 per liter, service fee through FPT North Pipeline at Baht 0.44 per
liter, and transportation expenses by truck at Baht 0.08 per liter. (Based on the diesel price around Baht 23 per liter, as of
December 2015).
In addition, it is assumed that throughput fee will increase 2% per annum, throughout the
projection period, referenced to the estimated inflation rate of 2016 at 1% - 2% per annum by Macro
Economic Strategy and Planning Office (Source: Thailand Economic Performance in Q3 and Outlook
for 2015 2016, dated November 16, 2015) and target inflation rate of 2016 at 2.5% + 1.5% (or
around 1.0% - 4.0%) by the Bank of Thailand.
At the present, there is no government agency responsible for oversight service fees for
transportation of fuel via fuel pipeline systems. However, the meeting of the National Energy Policy
Council (NEPC) held on December 22, 2015 has assigned the Energy Policy Management
Committee (EPMC) to be responsible for overseeing the service fees for transportation of fuel via
fuel pipeline systems in order to prevent market dominance and monopoly and to provide protection
for oil traders and the public to access and receive the services at the fair prices and treatments, until
the Energy Regulatory Commission (ERC) has completed the imposition, updating or amendment of
the laws/regulations concerning the fuel pipeline transportation systems.
However, CapAd viewed that the estimation of the service fees based on the competitive fees
comparing with other transportation means is reasonable, and the growth rate of the service fees
based on estimated inflation rate that can reflect an increase in operating costs of the Project is
reasonable.
Volume of Petroleum Products

Volume of petroleum products shipped through fuel pipeline networks of the North Pipeline
Project is based on sale volume of gasoline and diesel in the Northern Thailand in the year 2013 and
9M2014, and proportion of demand for gasoline and diesel in 2013 2014 and 8M2015 (Source: the
Department of Energy Business, Ministry of Energy). It is assumed that demands of petroleum
products shall increase 2% per annum, throughout the projection period.
FPT has estimated the market share for the North Pipeline Project by referring to existing
customers of FPT and tendency of shippers to shift from other transportation means to FPT North
Pipeline. This is due to transportation of petroleum products via underground pipeline network is more
convenient and safer than transportation by trucks, a policy of FPT to set a competitive service fee
and the governments policy to support the transportation of fuel via pipeline systems.
Estimated market share of Phase 1 (Phichit Depot) is 13.50% of total demand in lower part of
Northern Thailand in 2018, 50% in 2019, 60% in 2020, 65% in 2021, and 70% from 2022 onwards.
(Phase 1 Phichit Depot covers 11 provinces, namely, Nakhon Sawan, Uthai Thani, Kamphaeng
Phet, Tak, Sukhothai, Phitsanulok, Phichit, Phetchabun, Uttaradit, Phrae and Nan (collectively called
the Lower North). (Such grouping is not made on a geographical basis, but based on the provinces
expected to use services from Phichit Depot) The estimation of the market share of FPT is based on
the existing customer bases of FPT and tendency of shippers to shift from other transportation means
to FPT North Pipeline in the future. At the present, existing customers of FPT (Bang Pa-In Depot) and
Thappline (Saraburi Depot) have market shares around 20% - 30% and 40% - 50% of total demand in
the Northern Thailand, respectively (total existing customers of FPT and Thappline are account for
70% of total demand in the Northern Thailand).
Estimated market share of Phase 2 (Lampang Depot) is 25% in 2019, 50% in 2020, 60% in
2021, 65% in 2022, 70% in 2023, and 75% from 2024 onwards. (Phase 2 Lampang Depot covers 6
provinces, namely, Chiang Mai, Lamphun, Lampang, Phayao, Chiang Rai and Mae Hong Son,
collectively called the Upper North). (Such grouping is not made on a geographical basis, but based
on the provinces expected to use services from Lampang Depot) The market share of Phase 2

(Lampang Depot) is expected to be higher than those of Phase 1 due to the Upper North is remote
and there are less transportation means comparing to those of the Lower North.
The IFA views that the forecasted market share is possible due to (a) it is the current actual
demand of fuel in the Northern Thailand and (b) historical changes of fuel transport from trucks to fuel
pipeline transportation of the current FPT pipeline (Bangchak Don Muang Bang Pa-In) and
Thappline pipeline (Maptaphut Lamlukka Saraburi).
Demand of gasoline and diesel in the Northern and Volume of Petroleum Products Shipped
via the North Pipeline Project
Transportation incomes 2016F 2017F 2018F 2019F 2020F 2021F 2022F 2023F 2024F 2025F
Demand of gasoline and diesel in the Northern
1/2/
- Lower North 1,826.10 1,862.62 1,899.88 1,937.87 1,976.63 2,016.16 2,056.49 2,097.62 2,139.57 2,182.36
1/3/
- Upper North 1,224.22 1,248.71 1,273.68 1,299.15 1,325.14 1,351.64 1,378.67 1,406.25 1,434.37 1,463.06
Total demand 3,050.32 3,111.33 3,173.56 3,237.03 3,301.77 3,367.80 3,435.16 3,503.86 3,573.94 3,645.42
Market share
- Phase 1 Phichit Depot - - 13.50% 50.00% 60.00% 65.00% 70.00% 70.00% 70.00% 70.00%
- Phase 2 Lampang - - 0.00% 25.00% 50.00% 60.00% 65.00% 70.00% 75.00% 75.00%
Depot
Volume via FPT
- Phase 1 Phichit Depot - - 256.48 968.94 1,185.98 1,310.51 1,439.54 1,468.33 1,497.70 1,527.65
(million liters/year)
Phase 2 Lampang - - - 324.79 662.57 810.98 896.14 984.37 1,075.78 1,097.29
Depot (million
liters/year)
Total volume via FPT - - 256.48 1,293.73 1,848.55 2,121.49 2,335.68 2,452.70 2,573.48 2,624.95
Service fees
- Phase 1 Phichit Depot - - 0.21 0.21 0.21 0.22 0.22 0.23 0.23 0.24
(Baht/liter)
Phase 2 Lampang - - - 0.44 0.45 0.46 0.47 0.48 0.49 0.50
Depot (Baht/liter)
Revenue from transportation services
- Phase 1 Phichit Depot - - 53.86 203.48 254.04 286.32 320.81 333.77 347.25 361.28
(Baht million)
Phase 2 Lampang - - - 142.91 297.36 371.25 418.43 468.83 522.61 543.72
Depot (Baht million)
Total revenue from - - 53.86 346.38 551.40 657.57 739.24 802.59 869.86 905.00
transportation services
(Baht million)
1/2/
- Lower North 2,226.01 2,270.53 2,315.94 2,362.26 2,409.50 2,457.69 2,506.85 2,556.98 2,608.12 2,660.29
1/3/
- Upper North 1,492.32 1,522.16 1,552.61 1,583.66 1,615.33 1,647.64 1,680.59 1,714.20 1,748.49 1,783.46
Total demand 3,718.33 3,792.69 3,868.55 3,945.92 4,024.84 4,105.33 4,187.44 4,271.19 4,356.61 4,443.75
Market share
- Phase 1 Phichit Depot 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00%
- Phase 2 Lampang 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00%
Depot
Volume via FPT
- Phase 1 Phichit Depot 1,558.21 1,589.37 1,621.16 1,653.58 1,686.65 1,720.39 1,754.79 1,789.89 1,825.69 1,862.20
Phase 2 Lampang 1,119.24 1,141.62 1,164.46 1,187.75 1,211.50 1,235.73 1,260.44 1,285.65 1,311.37 1,337.59
Depot (million
liters/year)
Total volume via FPT 2,677.45 2,730.99 2,785.61 2,841.33 2,898.15 2,956.12 3,015.24 3,075.54 3,137.05 3,199.79
Service fees
- Phase 1 Phichit Depot 0.24 0.25 0.25 0.26 0.26 0.27 0.27 0.28 0.28 0.29
(Baht/liter)
Phase 2 Lampang 0.51 0.52 0.53 0.54 0.55 0.56 0.57 0.58 0.59 0.60
Depot (Baht/liter)
(Baht million)
Phase 2 Lampang 565.69 588.54 612.32 637.06 662.79 689.57 717.43 746.41 776.57 807.94
Total revenue from 941.56 979.60 1,019.18 1,060.35 1,103.19 1,147.76 1,194.13 1,242.37 1,292.57 1,344.79
(Baht million)

1/2/
- Lower North 2,713.49 2,767.76 2,823.12 2,879.58 2,937.17 2,995.91 3,055.83 3,116.95 3,179.29 3,242.87
1/3/
- Upper North 1,819.13 1,855.51 1,892.62 1,930.47 1,969.08 2,008.46 2,048.63 2,089.61 2,131.40 2,174.03
Total demand 4,532.62 4,623.27 4,715.74 4,810.05 4,906.25 5,004.38 5,104.47 5,206.56 5,310.69 5,416.90
Market share
- Phase 1 Phichit Depot 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00% 70.00%
- Phase 2 Lampang 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00% 75.00%
Depot
Volume via FPT
- Phase 1 Phichit Depot 1,899.44 1,937.43 1,976.18 2,015.71 2,056.02 2,097.14 2,139.08 2,181.86 2,225.50 2,270.01
Phase 2 Lampang 1,364.35 1,391.63 1,419.47 1,447.85 1,476.81 1,506.35 1,536.48 1,567.20 1,598.55 1,630.52
Depot (million
liters/year)
Total volume via FPT 3,263.79 3,329.07 3,395.65 3,463.56 3,532.83 3,603.49 3,675.56 3,749.07 3,824.05 3,900.53
Service fees
(Baht/liter)
Phase 2 Lampang 0.62 0.63 0.64 0.65 0.67 0.68 0.69 0.71 0.72 0.74
Depot (Baht/liter)
(Baht million)
Phase 2 Lampang 840.58 874.54 909.87 946.63 984.88 1,024.66 1,066.06 1,109.13 1,153.94 1,200.56
Total revenue from 1,399.12 1,455.64 1,514.45 1,575.63 1,639.29 1,705.51 1,774.42 1,846.10 1,920.69 1,998.28
(Baht million)
Remark:
1/ Volume of petroleum products shipped through pipeline networks of the North Pipeline Project is based on sale volume of
gasoline and diesel in the Northern Thailand in the year 2013 and 9M2014, and proportion of demand for gasoline and
diesel in 2013 2014 and 8M2015 (Source: Department of Energy Business, Ministry of Energy).
2/ The Lower North consists of 11 provinces, namely, Nakhon Sawan, Uthai Thani, Kamphaeng Phet, Tak, Sukhothai,
Phitsanulok, Phichit, Phetchabun, Uttaradit, Phrae and Nan. (Such grouping is not made on a geographical basis, but
based on the provinces expected to use services from Phichit Depot.)
3/ The Upper North consists of 6 provinces, namely, Chiang Mai, Lamphun, Lampang, Phayao, Chiang Rai and Mae Hong
Son. (Such grouping is not made on a geographical basis, but based on the provinces expected to use services from
Lampang Depot.)
Storage handling charges

Storage handling charges derive from petroleum storage services at Phichit Depot and
Lampang Depot with total storage capacity of 140 million liters. FPT has assumed that revenue from
storage services will be around 80 million liters per year. However, total storage quantity of the
storage tanks shall not exceed 90% of total capacity of storage tanks.8
Monthly storage fee will be Baht 0.10 per liter, throughout the projection period. This monthly
storage fee is close to the current storage fee of FPT, which is in the range of Baht 0.06 0.13 per
liter.
Storage handling charges 2016F 2017F 2018F 2019F 2020F 2021F 2022F 2023F 2024F 2025F
Capacity of storage tanks
- Phichit Depot (million - - 70 70 70 70 70 70 70 70
liters)
- Lampang Depot (million - - - 70 70 70 70 70 70 70
8
Total storage capacity of Phichit Depot and Lampang Depot is around 140 million liters. Total storage quantity of the storage
tanks shall not exceed 90% of total capacity of storage tanks or 126 million liters. Storage fuels are divided to:
(a) Storage fuels of customers using FPTs North Pipeline transportation services which managed by FPT: Since the North
Pipeline Project has only 1 multi-product pipeline which will transport gasoline or diesel by batch, storage spaces for every
types of fuels in storage tanks at the destination depots are required in order to be able to service every types of fuels (to
fill into fuel transport trucks) at all times. This is the international operating procedures of fuel pipeline transportation
companies around the world.
FPT will not have any revenue from storage fuels in portion (a).
(b) Storage fuels of customers using FPTs storage service: Whenever the storage fuels in portion (a) do not reach 126
million liters, there will be a remaining storage capacity for FPT to storage fuels of customers by charging storage handling
fee. By using this storage handling services of FPT, customers do not have to build their own depots.
FPT will have storage handling fee revenue from storage fuels in portion (b).
FPT has a policy for fuel reserves of around 7 days for portion (a). However, in the future when portion (a) gradually increase
due to increasing fuel pipeline transportation services activities, the remaining storage handling space will be gradually reduced
(or portion (b) will be gradually reduced).

liters)
Total capacity of storage - - 70 140 140 140 140 140 140 140
tanks (million liters)
Storage volumes
- Phichit Depot (million - - 40.00 40.00 40.00 37.87 35.39 34.84 34.28 33.70
liters)
- Lampang Depot (million - - - 40.00 40.00 40.00 40.00 40.00 40.00 40.00
liters)
Total storage volumes - - 40.00 80.00 80.00 77.87 75.39 74.84 74.28 73.70
(million liters)
1/
% of capacity of the storage tanks
- Phichit Depot (%) - - 57% 57% 57% 54% 51% 50% 49% 48%
- Lampang Depot (%) - - - 57% 57% 57% 57% 57% 57% 57%
Storage fee
- Phichit Depot 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10
(Baht/liter/month)
- Lampang Depot 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10
(Baht/liter/month)
- Phichit Depot (Baht - - 24.53 48.67 48.67 46.07 43.06 42.39 41.70 41.00
million)
- Lampang Depot (Baht - - - 24.53 48.67 48.67 48.67 48.67 48.67 48.67
million)
Total storage handling - - 24.53 73.20 97.33 94.74 91.73 91.06 90.37 89.67
charges (Baht million)
- Phichit Depot (million 70 70 70 70 70 70 70 70 70 70
liters)
- Lampang Depot (million 70 70 70 70 70 70 70 70 70 70
liters)
Total capacity of storage 140 140 70 140 140 140 140 140 140 140
Storage volumes
- Phichit Depot (million 33.12 32.52 31.91 31.29 30.65 30.01 29.35 28.67 27.99 27.29
liters)
- Lampang Depot (million 40.00 40.00 40.00 40.00 39.77 39.30 38.83 38.34 37.85 37.35
liters)
Total storage volumes 73.12 72.52 71.91 71.29 70.42 69.31 68.17 67.02 65.84 64.63
(million liters)
1/
- Phichit Depot (%) 47% 46% 46% 45% 44% 43% 42% 41% 40% 39%
- Lampang Depot (%) 57% 57% 57% 57% 57% 56% 55% 55% 54% 53%
Storage fee
- Phichit Depot 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10
(Baht/liter/month)
- Lampang Depot 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10
(Baht/liter/month)
- Phichit Depot (Baht 40.29 39.56 38.82 38.07 37.29 36.51 35.70 34.89 34.05 33.20
million)
- Lampang Depot (Baht 48.67 48.67 48.67 48.67 48.38 47.82 47.24 46.65 46.05 45.44
million)
Total storage handling 88.96 88.23 87.49 86.73 85.68 84.32 82.94 81.54 80.10 78.64
- Phichit Depot (million 70 70 70 70 70 70 70 70 70 70
liters)
- Lampang Depot (million 70 70 70 70 70 70 70 70 70 70
liters)
Total capacity of storage 140 140 70 140 140 140 140 140 140 140
Storage volumes
- Phichit Depot (million 26.57 25.84 25.10 24.34 23.57 22.78 21.98 21.16 20.32 19.47
liters)
- Lampang Depot (million 36.83 36.31 35.78 35.23 34.68 34.11 33.53 32.94 32.34 31.73
liters)
Total storage volumes 63.41 62.15 60.88 59.58 58.25 56.89 55.51 54.10 52.66 51.20
(million liters)

1/
- Phichit Depot (%) 38% 37% 36% 35% 34% 33% 31% 30% 29% 28%
- Lampang Depot (%) 53% 52% 51% 50% 50% 49% 48% 47% 46% 45%
Storage fee
- Phichit Depot 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10
(Baht/liter/month)
- Lampang Depot 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10 0.10
(Baht/liter/month)
- Phichit Depot (Baht 32.33 31.44 30.54 29.62 28.68 27.72 26.74 25.74 24.72 23.68
million)
- Lampang Depot (Baht 44.82 44.18 43.53 42.87 42.19 41.50 40.80 40.08 39.35 38.60
million)
Total storage handling 77.14 75.62 74.07 72.48 70.87 69.22 67.54 65.82 64.07 62.29
Remark: 1/ At the present, FPT provided storage handling services at Don Muang Depot and Bang Pa-In Depot, totaling of
56 million liters or around 60% of total capacity of storage tanks.
2) Cost of Services
Cost of services consists of land lease fee, utilities expenses, employee expenses, repair and
maintenance expenses, insurance premium and other expenses,
- Land lease fee will be based on the land lease agreement with the Department of Highways for
30-year period. Land lease fee is estimated at 5% of the appraisal price of land and will be
increased 15% every 5 years (Reference to the Department of Highways Order No. KorKor
0611/157/2544, subject: guideline to determine land lease fee for running of pipe along/under the
highway areas.) FPT has estimated total lease areas of 124,460 sq.m. for Phase 1: Bang Pa-In
Phichit, and 67,056 sq.m. for Phase 2: Kamphaeng Phet Lampang. The lease areas are
estimated by using length and size of pipes. In addition, FPT has assumed that annual lease fee
for the 1st year at Baht 30 per sq.m. (This annual lease fee is calculated by the average appraisal
price of land around Baht 0.96 million per rai or Baht 600 per sq.m., which is based on the
Treasury Department's land appraisal prices for 2012 2015.)
- Utilities expenses for pipeline systems are assumed at Baht 0.0136 per liter for Phase 1 Phichit
Depot and Baht 0.0247 per liter for Phase 2 Lampang Depot, which are based on the estimation
of FPTs engineering department, and to increase 2% per annum. Size of Phase 1s line pipe is
estimated at 14 and 12, and size of Phase 2s line pipe is estimated at 12.
- Utilities expenses of depots are assumed at Baht 4.00 million per year, which is based the utilities
expenses of the current depots of FPT, and to increase 2% per annum.
- Employee expenses consist of salary, bonus, over-time, wages for temporary workers and other
employee benefits. FPT has expected to hire 69 staffs. Growth of salary is assumed at 7% per
annum, and growth of other employee expenses are assumed at 2% per annum. The average
employee expenses for each employee are around Baht 0.50 million per year.
- Annual repair and maintenance expenses are around 0.45% of cost of fixed assets (excluding
land), which is closed to the historical expenses of FPTs existing project for 2014 and 9M2015.
- Insurance consists of all risk, political violence and third party insurance. Based on FPTs existing
project, FPT has estimated insurance premium of 2019 at Baht 20.04 million, and the insurance
premium is to increase 2% per annum. However, insurance expenses account for 4.78% of
revenue from services in 2019, 3.15% of revenue from services in 2020, and 2.77% 1.63% of
revenue from services in 2021 2045. (Insurance expenses for existing project of FPT 3.62% and
2.60% of revenue from services in 2014 and 9M2015, respectively.)
- FPT has planned to rent 18 vehicles with the average lease fee of Baht 12,500 12,700 per
month and to increase 2% per annum.
- Communication expenses for each depot are estimated at Baht 2.35 million per year or around
Baht 4.71 million, and to increase 2% per annum. The communication expenses referred to the
annualized communication expenses of 9M2015 of FPTs existing projects, which was around
Baht 2.35 million.
- Inspection fee is assumed at Baht 1.92 million for each depot, or total inspection fee of the Project
is Baht 3.84 million, and to increase 2% per annum. The inspection fee referred to the annualized
inspection fee of 9M2015 and the year 2014 of FPTs existing projects, which was around Baht
1.75 million.
- Other expenses are estimated at Baht 2.00 million for each depot, or total inspection fee of the
Project is Baht 4.00 million, and to increase 2% per annum. The inspection fee referred to the

annualized inspection fee of 9M2015 of FPTs existing projects, which was around Baht 2.01
million.
(Unit: Baht million)
Cost of Services 2016F 2017F 2018F 2019F 2020F 2021F 2022F 2023F 2024F 2025F
Land lease fee - - 5.75 5.75 5.75 6.61 6.61 6.61 6.61 6.61
Utilities expenses - Pipeline - - 3.73 23.05 36.01 42.78 48.08 52.06 56.28 58.55
Utilities expenses - Depots - - 2.12 8.66 8.83 9.01 9.19 9.37 9.56 9.75
Employee expenses - - 7.65 32.70 34.83 36.99 39.29 41.75 44.37 47.17
Repair and maintenance - - 8.54 17.11 17.13 17.15 17.17 34.39 34.44 34.48
Insurance expenses - - 5.01 20.04 20.44 20.85 21.26 21.69 22.12 22.56
Vehicle rental fees - - 0.68 2.72 2.78 2.83 2.89 2.95 3.01 3.07
Communication expenses - - 1.18 4.71 4.80 4.90 5.00 5.10 5.20 5.30
Inspection fees - - 0.96 3.84 3.92 4.00 4.08 4.16 4.24 4.33
Other expenses - - 1.00 3.06 4.16 4.24 4.33 4.42 4.50 4.59
Total cost of services - - 36.62 121.63 138.64 149.35 157.89 182.48 190.33 196.42
Land lease fee 7.60 7.60 7.60 7.60 7.60 8.74 8.74 8.74 8.74 8.74
Utilities expenses - Pipeline 60.92 63.38 65.94 68.60 71.37 74.26 77.26 80.38 83.62 87.00
Utilities expenses - Depots 9.95 10.15 10.35 10.56 10.77 10.98 11.20 11.43 11.65 11.89
Employee expenses 50.17 53.37 56.78 60.44 64.34 68.50 72.96 77.72 82.81 88.24
Repair and maintenance 34.53 34.71 34.75 34.80 34.84 34.89 34.93 34.98 35.02 35.07
Insurance expenses 23.01 23.47 23.94 24.42 24.91 25.41 25.92 26.44 26.97 27.50
Vehicle rental fees 3.13 3.19 3.26 3.32 3.39 3.45 3.52 3.59 3.67 3.74
Communication expenses 5.41 5.52 5.63 5.74 5.85 5.97 6.09 6.21 6.34 6.46
Inspection fees 4.41 4.50 4.59 4.68 4.78 4.87 4.97 5.07 5.17 5.28
Other expenses 4.69 4.78 4.88 4.97 5.07 5.17 5.28 5.38 5.49 5.60
Total cost of services 203.81 210.66 217.72 225.13 232.92 242.25 250.87 259.93 269.48 279.52
Land lease fee 10.05 10.05 10.05 10.05 10.05 11.56 11.56 11.56 11.56 11.56
Utilities expenses - Pipeline 90.52 94.18 97.98 101.94 106.06 110.34 114.80 119.44 124.26 129.28
Utilities expenses - Depots 12.13 12.37 12.62 12.87 13.12 13.39 13.66 13.93 14.21 14.49
Employee expenses 94.05 100.27 106.91 114.00 121.59 129.70 138.38 147.65 157.56 168.17
Repair and maintenance 35.11 35.29 35.34 35.38 35.43 35.47 35.52 35.56 35.61 35.79
Insurance expenses 28.05 28.62 29.19 29.77 30.37 30.97 31.59 32.23 32.87 33.53
Vehicle rental fees 3.81 3.89 3.97 4.05 4.13 4.21 4.30 4.38 4.47 4.56
Communication expenses 6.59 6.72 6.86 7.00 7.14 7.28 7.42 7.57 7.72 7.88
Inspection fees 5.38 5.49 5.60 5.71 5.82 5.94 6.06 6.18 6.30 6.43
Other expenses 5.71 5.83 5.94 6.06 6.18 6.31 6.43 6.56 6.69 6.83
Total cost of services 291.41 302.70 314.44 326.83 339.89 355.17 369.71 385.06 401.26 418.50
3) Administrative Expenses
Administrative expenses consist of security expenses, cleaning expenses and other
expenses. Administrative expenses are assumed at Baht 13.45 million per annum, and to increase
2% per annum, based on the existing project of FPT and its estimation.
4) Project Costs
Total costs of the North Pipeline Project are around Baht 7,500 million, consisted of costs of
land, consulting fees, costs of pipes, pumps, and valves, construction costs of pipeline systems and
depots, and miscellaneous expenses.
- Total costs of land for construction of depots at Phichit and Lampang, and 5 booster stations are
around Baht 99 million.
- Consulting fees are around Baht 466 million composed of consulting fee for Environmental Impact
Assessment Study, consulting fee for Engineering Study, design fee and project management fee.
Such fee is quoted by each advisor. The fee payment will be made in installment as specified in
the agreements.
- Procurement cost of pipe, pump, and valve is approximately Baht 2,329 million. Such cost was
quoted by the seller of pipe and equipment. FPT will import pipe and related equipment from
abroad. The payment will be made when the pipe and equipment are delivered.
- The Turn-Key construction cost of pipeline system and fuel depot is about Baht 4,159 million. The
construction cost is estimated by an Engineering Study advisor who had an experience to design
and construct High Speed Diesel (HSD) storage and water tank for fire extinguisher and related
system to FPT at Don Muang Depot. The payment condition for construction cost in general will be
made in installment against work progress of the project.

- Miscellaneous expenses are around Baht 447 million including right of way, transportation
expenses, pipeline test with Intelligent PIG, transportation expenses, insurance expenses and
contingency costs. Contingency costs are estimated around Baht 249 million (or around 3.3% of
the project costs.)
Summary of project costs and timeline, based on the estimation of FPTs managements and
the engineering department, are as follows;
Project Costs Estimated Payment Period
Costs 2015A 2016F 2017F 2018F 2019F
1/
Costs of land 99.00 81.21 17.79 - - -
2/ 3/
Consulting fees 466.00 11.18 181.83 112.00 154.00 7.00
Costs of pipes, pumps, and valves 2,329.00 - 1,577.00 576.00 176.00 -
Construction cost of pipeline system 4,159.00 - 1,723.00 1,478.00 958.00 -
and depots
Miscellaneous expenses 447.00 - 158.00 108.00 172.00 9.00
4/
Land lease fees to be capitalized 11.49 - 5.75 5.75 - -
Total project costs 7,511.49 92.39 3,663.36 2,279.75 1,460.00 16.00
Remark:
1/ Consisted of 44 land plots with total areas of 83-2-03 rai in Lampang at total value of Baht 23.71 million while the payments
and transfers of land ownership were made on December 1, 2015, and plots of land with total areas of 120-1-6 rai in Phichit
(after title deed consolidation and do cadastral survey, the land area becomes 118-3-33 rai) at total value of Baht 57.50
million when transfers of land ownership were made on December 28, 2015.
2/ Majority of consulting fees is project management fee of which accounted for 10% of construction costs.
3/ Consisted of partial fees of consulting fee for Environmental Impact Assessment Study and consulting fee for Engineering
Study.
4/ Land lease fees during construction period of 2 years shall be capitalized to project costs.
CapAd reviewed the engineering study of the North Pipeline Project Phase 1 of FPT, which
was prepared by Index International Group Co., Ltd. (Index) in 2013, and found that the project cost
was estimated at Baht 4,086.25 million (Phase 1 only). However, FPT appointed Index to revise the
estimated project costs in various options. Conclusively, from the latest estimation by Index on
November 13, 2015, the total project costs of Phase 1 and Phase 2 are estimated at Baht 8,764.13
million, which is higher than the project costs of the North Pipeline Project of Baht 7,500 million. The
managements and engineering department of FPT estimated the project costs of the North Pipeline
Project by adjusted the project costs prepared by Index. FPT has changed size of line pipe (some
ranges) from 12 to 14 as a result number of booster stations to be reduced by 2 stations. In addition,
FPT received quotations for major machinery and pipeline systems from a number of suppliers, which
are lower than the estimation by Index.
5) Capital Expenditures
The North Pipeline Project is a capital intensive investment project, where FPT has designed
the fuel pipeline systems using technology to reduce erosion. Thus, useful life of the fuel pipeline
systems should be long if there is regular maintenance.
In addition to annual maintenance and replacement of spare parts (included in cost of
services), majority of capital expenditure after the initial investments is pipeline inspection by using
intelligent pigs in every 10-year period and the cost of inspection is assumed at Baht 30 million each,
based on the current information of the inspection price.
Besides, CapAd assumes additional capital expenditure of 0.1% of the project costs or around
Baht 7 million per annum, throughout the projection period, based on conservative basis.
6) Financial Costs
In this financial forecast, sources of funds for the North Pipeline Project will derive from loans
from (a) a financial institution of not exceeding Baht 4,600 million and (b) capital increased by issuing
of newly-issued ordinary shares of FPT offering to its existing shareholders of Baht 3,400 million.
Uses of funds are for the project costs of not exceeding Baht 7,500 million and interest payments of
not exceeding Baht 500 million.
CapAd assumes that the long-term loans from financial institution will be 11 years with 3
years of grace period, based on the repayments schedules of the existing loans of FPT and adjusted
to construction period of the North Pipeline Project. Interest rate is based on the average MLR of
commercial banks at 6.513% p.a. (average MLR of the 4 large commercial banks in Thailand as of
January 5, 2016) minus 1.25% per annum, or around 5.263% per annum, based on the existing
borrowing rate of FPT.

7) Assets and liabilities turnovers

Key working capital turnovers of the North Pipeline Projects, which is based on those of the
existing project of FPT, are as follows:
Trade and other account receivables 35 days on average
Spare parts 4 days on average
Trade and other payables 30 days on average
8) Terminal Value
CapAd assumes that land lease agreement with the Department of Highways will be renewal
in the future. This is due to the fuel pipeline project is supported by the government for benefits to the
country as a whole. The pipeline transportation is safer than transportation of fuel by trucks, and it is
more convenient for people to access fuel supply. In addition, the useful life of the fuel pipeline
system is more than 30 years9 due to anti-rust coating both inside and outside of the line pipes and
cathodic protection system to protect corrosion will be used and installed. Moreover, pipeline
inspection gauge by using Intelligent PIGs (Pipeline Inspection Gauge), which is based on
international standard, will be implemented every 10-year period. Therefore, the IFA assumes
terminal growth at 0% per annum, based on conservative basis.
9) Discount Rate
The IFA has applied the Weighted Average Cost of Capital (WACC), which derived from the
weighted average of Cost of Debt (Kd) and Cost of Equity (Ke) of the Company as a discount rate to
calculate the present value of free cash flows from the project based on the following formula;
WACC = Ke*E/(D+E) + Kd*(1-T)*D/(D+E)
Ke = Cost of equity or shareholders required rate of return (Re)

Kd = Cost of debt or loan interest rate of the Company
T = Corporate income tax rate
E = Total shareholders equity
D = Interest-bearing debt
Cost of equity (Ke) or the required rate of return for shareholders (Re) is derived from the
Capital Asset Pricing Model (CAPM) as follows;
Ke (or Re ) = Rf + (Rm - Rf)
Whereby
Risk Free Rate (Rf) = 3.62% p.a. based on 30-year government bond yield (information as of
December 18, 2015), which is currently the longest government bond that is
regularly issued or offered for sale by the Government, therefore, aligned with
the assumption that WCIGs operation is on an on-going basis.
Beta () = 0.5 1.1 times based on average unlevered beta of the Company (1-year
historical data until December 18, 2015), and then adjusted with the
estimated debt to equity ratio of the Company after this transaction.
Market Risk (Rm) = 15.01% p.a., per annum, which is the 31-year average rate of monthly return
from the investment in market portfolio of the Stock Exchange of Thailand
(January 1985 December 2015). However, CapAd did not take into
account the market returns during 1975 1984 because they were returns
9
Many fuel pipeline systems in the United States of America, which were constructed in 1940 1950, have been operated over
70 years till the present, such as
- Big Inch Pipeline, constructed in 1942 (https://en.wikipedia.org/wiki/Big_Inch)
- Plantation Pipeline, constructed in 1942 (http://www.kindermorgan.com/business/products_pipelines/plantation_history
.aspx)
- Platte Pipeline, operated since 1952 (http://www.spectraenergy.com/Operations/Crude-Oil-Transportation/Platte-Pipeline/
and http://consumerenergyalliance.org/cea-shares-insight-keystone-xl-pipeline-meeting/)
- Trans Mountain Pipeline, operated since 1953 (http://www.transmountain.com/current-pipeline-operations)
- Yellowstone Pipeline, operated since 1954 (http://insideclimatenews.org/news/20150122/ruptured-yellowstone-oil-pipeline-
was-built-faulty-welding-1950s)
- Jayhawk Pipeline, operated since 1957 (http://www.jayhawkpl.com/ and http://consumerenergyalliance.org/cea-shares-
insight-keystone-xl-pipeline-meeting/)
- Colonial Pipeline, constructed in 1961 (https://en.wikipedia.org/wiki/Colonial_Pipeline)

during the establishment of the Stock Exchange when few companies were
listed and trading volume was still limited. Therefore, they may not reflect the
actual market return.
Kd = Estimated interest rate of the Project = 5.14% p.a., which is the average
interest rate of the Company and its subsidiaries after this transaction.
D/E Ratio = Estimated D/E ratio at 0.01 - 1.44 times, equivalent to estimate D/E ratio of
the Company after this transaction.
T = Estimated corporate income tax rate = 20% p.a.
Therefore, WACC is equal to 8.94% 9.28% p.a.
By using above information and assumptions, the calculation of the North Pipeline Projects
Income Statement is as follows;
Income Statements 2016F 2017F 2018F 2019F 2020F 2021F 2022F 2023F 2024F 2025F
Revenues from services - - 78.39 419.58 648.73 752.31 830.97 893.65 960.23 994.67
Gross profit (excluding - - 41.78 297.95 510.09 602.96 673.07 711.17 769.90 798.25
depreciation)
EBITDA - - 38.42 287.66 496.10 588.69 658.52 696.32 754.76 782.81
EBIT - - (99.63) 10.57 218.00 309.59 378.42 415.22 472.66 499.71
Financial expenses - - (99.26) (232.41) (210.63) (183.99) (152.52) (118.63) (83.52) (47.21)
Net profit - - (198.89) (221.85) 7.37 125.60 225.90 296.59 389.14 452.50
Revenues from services 1,030.52 1,067.83 1,106.67 1,147.09 1,188.87 1,232.09 1,277.08 1,323.91 1,372.67 1,423.42
Gross profit (excluding 826.71 857.17 888.95 921.96 955.95 989.83 1,026.21 1,063.98 1,103.19 1,143.90
depreciation)
EBITDA 810.96 841.10 872.56 905.24 938.90 972.44 1,008.47 1,045.88 1,084.73 1,125.07
EBIT 526.86 553.01 583.46 616.14 649.80 683.34 719.37 756.78 795.63 835.97
Financial expenses (14.53) - - - - - - - - -
Net profit 486.72 497.70 525.12 554.53 584.82 580.84 575.49 605.43 636.51 668.78
Revenues from services 1,476.26 1,531.26 1,588.52 1,648.11 1,710.15 1,774.73 1,841.95 1,911.92 1,984.76 2,060.57
Gross profit (excluding 1,184.85 1,228.57 1,274.07 1,321.29 1,370.26 1,419.56 1,472.24 1,526.87 1,583.50 1,642.06
depreciation)
EBITDA 1,165.64 1,208.98 1,254.09 1,300.91 1,349.48 1,398.36 1,450.61 1,504.81 1,561.00 1,619.11
EBIT 876.54 919.88 964.99 1,011.81 1,060.38 1,109.26 1,161.52 1,215.71 1,271.90 1,327.01
Financial expenses - - - - - - - - - -
Net profit 701.23 735.90 771.99 809.45 848.30 887.40 929.21 972.57 1,017.52 1,061.61
Free Cash Flow of the North Pipeline Project: FCF is as follows;

Free Cash Flow 2015A 2016F 2017F 2018F 2019F 2020F 2021F 2022F 2023F 2024F 2025F
EBIT - - - (99.63) 10.57 218.00 309.59 378.42 415.22 472.66 499.71
Less Corporate income - - - - - - - - - - -
taxes
Add Depreciation - - - 138.05 277.10 278.10 279.10 280.10 281.10 282.10 283.10
and amortization
1/
expenses
Less Working capitals - - - (6.08) (31.89) (22.20) (11.26) (8.63) (6.73) (7.15) (3.71)
Less Capital expenditures (92.39) (3,657.6) (2,274.0) (1,460.00) (26.00) (10.00) (10.00) (10.00) (10.00) (10.00) (10.00)
Free cash flow of the (92.39) (3,657.6) (2,274.0) (1,427.67) 229.78 463.90 567.43 639.89 679.59 737.62 769.09
Project
PV of FCFF (92.39) (3,357.46)(1,915.62)(1,103.87) 163.01 301.98 338.74 350.26 340.92 338.93 323.38
Free Cash Flow 2569F 2570F 2571F 2572F 2573F 2574F 2575F 2576F 2577F 2578F
EBIT 526.86 553.01 583.46 616.14 649.80 683.34 719.37 756.78 795.63 835.97
Less Corporate income (25.62) (55.30) (58.35) (61.61) (64.98) (102.50) (143.87) (151.36) (159.13) (167.19)
taxes
Add Depreciation 284.10 288.10 289.10 289.10 289.10 289.10 289.10 289.10 289.10 289.10
and amortization
1/
expenses
Less Working capitals (3.86) (4.02) (4.18) (4.35) (4.52) (4.70) (4.89) (5.09) (5.30) (5.51)
Less Capital expenditures (10.00) (40.00) (10.00) (10.00) (10.00) (10.00) (10.00) (10.00) (10.00) (10.00)
Free cash flow of the 771.48 741.78 800.03 829.27 859.39 855.24 849.70 879.43 910.31 942.37
Project
PV of FCFF 296.97 261.37 258.03 244.82 232.23 211.55 192.38 182.26 172.69 163.64

Free Cash Flow 2579F 2580F 2581F 2582F 2583F 2584F 2585F 2586F 2587F 2588F
EBIT 876.54 919.88 964.99 1,011.81 1,060.38 1,109.26 1,161.52 1,215.71 1,271.90 1,327.01
Less Corporate income (175.31) (183.98) (193.00) (202.36) (212.08) (221.85) (232.30) (243.14) (254.38) (265.40)
taxes
Add Depreciation 289.10 289.10 289.10 289.10 289.10 289.10 289.10 289.10 289.10 292.10
and amortization
1/
expenses
Less Working capitals (5.74) (5.97) (6.21) (6.47) (6.73) (7.00) (7.29) (7.58) (7.89) 204.95
Less Capital expenditures (10.00) (40.00) (10.00) (10.00) (10.00) (10.00) (10.00) (10.00) (10.00) (40.00)
Free cash flow of the 974.60 979.03 1,044.88 1,082.08 1,120.67 1,159.50 1,201.03 1,244.08 1,288.73 1,518.66
Project
PV of FCFF 154.91 142.44 139.15 131.91 125.05 118.43 112.29 106.46 100.95 108.89
Remark: 1/ Depreciation period of project cost is 27.50 years since the commercial operation of Phase 1 until end of land lease
agreement.
PV of FCFF (855.71)
PV of Terminal Value 1,177.45
Net Present Value (NPV) of the Project as of January 1, 2016 (Baht million) 321.75
Based on above assumptions, summary return of the North Pipeline Project is as follows;
Net Present Value (NPV) of the Project as of January 1, 2016 (Baht million) 321.75
Internal Rate of Return (IRR) (% p.a.) 9.50%
Payback Period (years) 14.27
Based on the feasibility study of the North Pipeline Project applying a discount rate at 8.94%
9.28%, the net present value of free cash flow (NPV) is Baht 321.75 million. The internal rate of return
(IRR) of the Project is 9.50% p.a., and the payback period is 14.27 years.
In addition, CapAd has conducted a sensitivity analysis by adjusting the market shares of the
North Pipeline Project in the Upper North and the Lower North regions, to increase (decrease) by
2.00% per annum since 2022 and 2033 onwards, respectively.
Summary of return of the North Pipeline Project from the sensitivity analysis is as follows;
Average Market Shares
Decreased 2% Base Case Increased 2%
Net Present Value (NPV) of the Project 203.04 321.75 440.58
as of January 1, 2016 (Baht million)
Internal Rate of Return (IRR) (% p.a.) 9.38% 9.50% 9.63%
Payback Period (years) 14.41 14.27 14.13
From above table, the net present value of free cash flow (NPV) of the North Pipeline Project
is Baht 203.04 440.58 million. The Internal rate of return (IRR) of the Project is 9.38% 9.63% p.a.,
and the payback period is 14.13 14.41 years.
Please note these calculations do not include the potential increases in volume of fuel,
revenues and profit to existing project of FPT (Bangchak Don Muang Bang Pa-In) after the North
Pipeline Project is operated.
Summary of the IFA opinion on the appropriateness of the investment of the North Pipeline
Project for the Company
From above information, CapAd views that the North Pipeline Project is able to generate a
reasonable return to the Company due to the net present value of the North Pipeline Project is Baht
203.04 440.58 million (or Baht 152.28 330.43 million for the Company, due to the Company held
75% in FPT), and IRR of the North Pipeline Project is higher than WACC of the Company, and the
payback period is 14.13 14.41 years. Therefore, the investment in the North Pipeline Project is
feasible and appropriate.

Part 4: Conclusion the IFA Opinion
Please see the conclusion of the IFA opinion in Executive Summary on Page 4 of this report.
However, the final decision shall be at own discretionary of the shareholders. The
shareholders should consider the information in the notice to the shareholders meeting and its
enclosures before making the decision.
CapAd, as the Independent Financial Advisor, hereby certifies that it has provided the above
opinion with due care in accordance with the professional standard for the benefit of the shareholders.
Yours sincerely,
Capital Advantage Company Limited
-Patchara Netsuwan-
(Mr. Patchara Netsuwan)

Managing Director

Attachment 1
Business Overview and Operating Results of
Fuel Pipeline Transportation Limited
1. General Information
Company Name : Fuel Pipeline Transportation Limited (FPT)
Main Business : Fuel pipeline transportation and fuel depot
Head Office : 424 Kamphaeng Phet 6 Road, Don Muang, Bangkok
Branch 1 : 30 Moo 10, Tambol Bangkrasun, Amphur Bang Pa-In, Phra Nakorn Si
Ayutthaya
Branch 2 : 82 Chuea Phloeng Road, Chong Nonsi, Yannawa, Bangkok
Branch 3 : 210 Soi Sukhumvit 64, Bangchak, Phrakhanong, Bangkok
Telephone : 0 2574 6180, 0 2929 5555
Fax : 0 2574 6101
Registered Capital : Baht 260,667,560 divided into 52,132,716 ordinary shares, at the par value
of Baht 5 per share and 796 cumulative preferred shares at par value of
Baht 5 per share
Paid-up Capital : Baht 260,667,560 divided into 52,132,716 ordinary shares, at the par value
of Baht 5 per share and 796 cumulative preferred shares at par value of
Baht 5 per share
2. Nature of Business
Fuel Pipeline Transportation Limited (FPT) was established on May 21, 1991, according to
the resolution of the Cabinet. Thai Airways International PCL. was a pivotal leader to set up a joint-
venture to operate fuel pipeline transportation route Bangchak-Donmuang-Bang Pa-In, including the
construction of the terminal fuel depot. Other shareholders are state-enterprises, oil companies,
financial institutions, and others.
On January 5, 1994, FPT started its operation by transporting aviation fuel from Chongnonsi
Depot to Donmuang Depot. In additional, the first day to operate the ground products via fuel pipeline
system to Bang Pa-In Depot was on March 30, 1994. FPT also supplied the aviation fuel to
Suvarnabhumi Airport in 1996 by transporting aviation fuel via pipeline system by JP-One Asset Co.,
Ltd. (JP-One), which connected to the pipeline system of FPT at Makasan Offtake Station on March
6, 1996.
On February 1, 2014, the entire business of JP-One was transferred to FPT, and FPT issued
24,278,941 ordinary shares at par value of Baht 57.50 per share to JP-One to compensate for the
entire business transfer to FPT, resulting increasing FPTs registered and paid-up capital to Baht
260,667,560. On February 3, 2014, FPT registered such increase in its registered capital with Ministry
of Commerce.
At present, FPT supplies aviation fuel and ground products via pipeline system up to 4,000
million liters per year. Its main suppliers are the leading Thai fuel companies. For example, Bangchak
Petroleum PCL., PTT PCL., Chevron (Thai) Co., Ltd., and Shell (Thailand) Co., Ltd., etc. FPT
supplies aviation fuel to Bangkok Aviation Fuel Services PCL. (the Company, or BAFS) to
refuelling the aircraft at Don Muang Airport and Suvarnabhumi Airport up to 1,700 million liters per
year. It also supplies ground products via road transportation to customers at Bang Pa-In Depot up to
1,900 million liters per year.
3. Board of Directors
As of November 27, 2015, FPT had 8 directors as follows:
Name Position
1. M.R. Supadis Diskul Chairmand of the Board
2. Mr. Buree Whanchid Director
3. Mr. Ditspong Prithaveepong Director
4. Mr. Prakobkiat Ninnad Director
5. Mr. Loyleuan Bunnag Director
6. Mr. Chatchai Pantai Director
7. Mr.Watana Opanon-amata Director
8. Mr. Singto Pichetwong Director
Remark:
- The authorization of the company is M.R. Supadis Diskul, Mr. Loyleuan Bunnag, Mr. Buree Whanchid, Mr. Chatchai Pantai,
Mr. Ditspong Prithaveepong, Mr. Prakobkiat Ninnad, and Mr. Watana Opanon-amata 2 of 7 directors co-sign and affix the
companys seal.
Attachment 1 Page 1
- In the next Extraordinary General Meeting of Shareholders of FPT, one of the existing directors will resign and 2 new
directors will be appointed, of which one is a representive from Bangkok Airways PCL. and the other is a representative
from PTG Logistics Co., Ltd. Hence, the number of FPTs directors will increase to nine.
4. Shareholder Structure
As of January 19, 2016, FPT had registered capital of Baht 260,667,560 with issued and paid-
up capital of Baht 260,667,560, divided into 52,132,716 ordinary shares at par value of Baht 5.00 and
796 cumulative preferred shares at par value of Baht 5.00. The shareholders list is as follows:
Shareholder name Number of shares % shareholding
1. Bangkok Aviation Fuel Services PCL. 39,100,184 75.00
2. PTG Logistics Co., Ltd. 4,979,396 9.55
3. Bangkok Airways PCL. 3,649,346 7.00
4. Bangchak Petroleum PCL. 2,583,156 4.95
5. Bangkok Insurance PCL. 1,820,922 3.49
6. Thai Airways International PCL. 133 0.00026
7. Ladawan Capital Co., Ltd. 133 0.00026
8. PTT PCL. 66 0.00013
9. Shell Thailand Co., Ltd. 44 0.00008
10. M.R. Supadis Diskul 44 0.00008
11. Air Total (Thailand) Co., Ltd. 22 0.00004
12. Esso (Thailand) PCL. 22 0.00004
13. State Railway of Thailand 22 0.00004
14. Susco Dealer Co., Ltd. 22 0.00004
Total 52,133,512 100.00
Source: BorAohJor. 5 as of January 19, 2016.
Remark: 796 FPTs preferred shares were held by BAFS of 647 shares and Bangchak Petroleum PCL.of 149 shares.
5. Summary of Financial Positions and Operating Results

- FPTs key financial figures for the year 2012 - 2014 ended December 31, 2012, 2013, 2014
and for 9-month ended September 30, 2015 were as follows:
(Unit: Baht thousand) Dec. 31, 2012 Dec. 31, 2013 Dec. 31, 2014 Sep. 30, 2015
(Audited) (Restated) (Audited) (Reviewed)
(Audited)
Current assets 157,283 355,387 370,945 438,240
Non-current assets 925,736 1,486,922 1,581,020 1,597,219
Total assets 1,083,020 1,842,309 1,951,965 2,035,459
Current liabilities 138,944 150,035 179,109 201,988
Non-current liabilities 882,765 840,128 869,882 846,421
Total liabilities 1,021,708 990,164 1,048,991 1,048,409
1/
Issued and paid-up capital 139,273 139,273 260,667 260,667
Share premium - - 1,279,500 1,279,500
Capital reduction from business consolidation - - (710,872) (710,872)
Retained earnings (losses) (10,609) (10,609) 73,677 154,071
Total shareholders equity 61,311 852,145 902,973 987,050
Total revenues 1,442,720 578,298 591,523 512,494

Total expenses 353,130 412,260 493,154 357,539
Profit (loss) before income tax 1,089,589 166,038 98,370 154,955
Income tax expense 27,224 32,281 13,041 30,735
Net profit (loss) 1,116,814 133,757 85,328 124,220
Remark:
- The financial statements of FPT for the year ended December 31, 2012, 2013 and 2014 were audited by EY Office Co.,
Ltd., an auditor in the approved list of the SEC. The financial statement ended September 30, 2015 was reviewed by EY
Office Co., Ltd. (but no statement is issued).
1/ As of December 31, 2013, FPT had issued and paid-up capital of Baht 139,272,855, divided into 27,853,775 ordinary shares and
796 cumulative preferred shares at par value of Baht 5 per share. On February 1, 2014, the entire business of JP-One was
transferred to FPT, and FPT issued 24,278,941 ordinary shares at par value of Baht 57.50 per share to JP-One to
compensate for the entire business transfer to FPT, resulting increasing FPTs paid-up capital to Baht 260,667,560. On
February 3, 2014, FPT registered such increase in its registered capital with Ministry of Commerce.
2/ Cost of merging business (fair value of issued share) was Baht 1,400.90 million but net asset of JP-One was Baht 690.02 million
which is lower than cost to merge the business so there was discount from merging business amounted to Baht 710.87 million.
Attachment 1 Page 2

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-TRANSLATION

January 27, 2016

Attachment: 1) Overview of business operation and performance of Fuel Pipeline Transportation

Capital Advantage Co., Ltd.

Capital Advantage Co., Ltd. Page 2/31

Capital Advantage Co., Ltd. Page 3/31

Capital Advantage Co., Ltd. Page 4/31

Details of the IFAs opinion are as follows:

Capital Advantage Co., Ltd. Page 5/31

Part 1: General Information on the Asset Acquisition Transaction

1. Nature and Details of the Transaction

1.2 Date of the Transaction

1.3 Parties Involved and Their Relationship

2) Construction and laying of fuel pipeline system

4) Land acquisition to build Phichit Depot

Capital Advantage Co., Ltd. Page 6/31

1.4 General Characteristics of the Transaction

Development plan of the North Pipeline Project

June 2015 September 2016 : Application for BOI

Capital Advantage Co., Ltd. Page 7/31

Quarter 1, 2018 Quarter 4, 2018 : Construction of fuel pipeline system Phase 2

1.5 Details of the Assets Being Acquired

Capital Advantage Co., Ltd. Page 8/31

Existing fuel pipeline and extension part to Northern Region

Extension pipeline to Northern Region of FPT

The extension of fuel pipeline transportation system to northern region

Capital Advantage Co., Ltd. Page 9/31

1.7 Calculation of Transaction Size

Capital Advantage Co., Ltd. Page 10/31

1.8 Sources of Funds

1.9 Conditions for the Transaction

Capital Advantage Co., Ltd. Page 11/31

Capital Advantage Co., Ltd. Page 12/31

Part 2: Opinion of the Independent Financial Advisor on Reasonableness of the Asset

2. Comparison of Advantages and Disadvantages of Entering into the Transaction

Capital Advantage Co., Ltd. Page 13/31

Capital Advantage Co., Ltd. Page 14/31

2.2 Disadvantages and Risks of the Transaction

Capital Advantage Co., Ltd. Page 15/31

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Capital Advantage Co., Ltd. Page 17/31

3. Conclusion of the Independent Financial Advisors Opinion on Reasonableness of the

Capital Advantage Co., Ltd. Page 18/31

Capital Advantage Co., Ltd. Page 19/31

Part 3: Opinion of the Independent Financial Advisor on the Appropriateness of the

1) Revenues from Services

The revenues from transportation services

Capital Advantage Co., Ltd. Page 20/31

Volume of Petroleum Products

Capital Advantage Co., Ltd. Page 21/31

Capital Advantage Co., Ltd. Page 22/31

Storage handling charges

Capital Advantage Co., Ltd. Page 23/31

Capital Advantage Co., Ltd. Page 24/31

Capital Advantage Co., Ltd. Page 25/31

Capital Advantage Co., Ltd. Page 26/31

Capital Advantage Co., Ltd. Page 27/31

7) Assets and liabilities turnovers

WACC = Ke*E/(D+E) + Kd*(1-T)*D/(D+E)

Ke = Cost of equity or shareholders required rate of return (Re)

Ke (or Re ) = Rf + (Rm - Rf)

Capital Advantage Co., Ltd. Page 28/31

Therefore, WACC is equal to 8.94% 9.28% p.a.

WACC = KeE/(D+E) + Kd(1-T)*D/(D+E)