Good afternoon. My name is Voranart, IR manager. Today I would like to welcome you to SPRC analyst meeting for the second quarter 2025 performance. Before we begin, I would like to introduce SPRC management who present in the meeting with us today. First, Mr. Herbert Matthew Payne, our CEO. Second, Khun Shashank Nanavati , Executive Vice President, Commercial. Third, Khun Nutsara Somkiatweera, Vice President, Finance and Accounting.
Khun Chaowasri Luengratanakorn, Vice President, Strategy, Policy and Development. We will refer to the presentation that available in SPRC website. Today, the meeting will begin with the key strategy and highlight presented by Mr. Matthew, followed by the performance analysis that presented by Khun Shashank and Khun Nutsara. Then Khun Chaowasri will present in part of looking ahead. Then we will start the Q&A sessions. At this time, I would like to hand on the session to our CEO, Khun Matthew. Please go ahead.
Good afternoon. First, thank you for being here and thank you for your interest in SPRC. At SPRC, we are committed to maintaining the financial strength needed to create maximum value for our shareholders. We believe that maintaining a strong financial position will be critical for us to be able to deliver reliable dividends and to seize on new opportunities as they arise. We will achieve this financial strength through two core activities. First, we will focus on safely and reliably optimizing our refining and marketing business.
This involves everything from how we source our crude oil, to how we optimize the operations of our refinery, to how we make sales to end customers, to how we continuously focus on reducing costs, boosting efficiencies, and also on how we build partnerships to maximize profitability of our business. Second, we will work on enhancing our cash generation through the profitable growth of our marketing business. This will focus on optimizing our sales channels so that we maximize our total sales margin. It will also focus on reducing our cost to serve and developing new higher margin export opportunities on a term basis.
Excellence in executing on these two core activities will ensure that we have that financial strength needed to deliver on our financial priorities. Next, we will touch on our financial priorities. SPRC's financial priorities are really based on three key concepts. First, we are committed to reliably providing a competitive dividend to our shareholders, as this is a core component of our promise to consistently return value. Second, we will maintain a strong balance sheet while pursuing strategic investments so that we support our long-term financial stability and our sustainable growth.
Third, coming back to returning value to shareholders, when our business financially performs above expectations, we will consider distributing that excess cash to our shareholders through additional dividends or through other appropriate methods. Next, we will look at some key highlights from the second quarter of 2025. In 2Q 2025, SPRC reported an EBITDA loss of $3 million and a net loss of $24 million. These losses were primarily driven by stock loss resulting from a declining oil price. However, when we exclude the $49 million of stock losses, the adjusted net profit stood at $15 million for the quarter, which underpins or reflects our strong core cash flow generation from operations.
Next, I will talk about a few successes. One continued success for SPRC continues to be our implementation of our bottom line improvement project or program, which contributed $0.92 per barrel in the second quarter to our margins. This was supported by how we sourced and optimized our crude and products and increased our retail volumes, helping us to avoid selling through lower netback channels. The refinery performed well in the second quarter with the operational availability of 97% and a utilization of 87%.
Another success in the second quarter is related to how we utilize our new commercial business to increase how we sell our products. Our domestic sales placement increased to 97% in the second quarter. This is in line with our strategy to maximize domestic sales because they generally provide higher netback or higher margin than our generic export options. Moving on to looking at our year-to-date performance through the first six months of 2025. SPRC delivered an EBITDA of $50 million, while reporting a net loss of $3 million.
Similar to the story for the second quarter, the net loss is primarily due to stock losses from a declining crude price, particularly in April. If we exclude the $42 million of year- to- date through the first six months stock losses, the adjusted profit would be $30 million. Reflecting again the strength of our core operations. I'll move on to a few highlights of enterprise value capture from the first half of the year. As we have begun integrating or as we've integrated our marketing business with our manufacturing business, we're seeing enterprise value capture in four key areas. The first being sales channel optimization.
This sales channel optimization through the first six months is best seen by our ability to increase our domestic sales to 96% of our total sales versus 90% for the same period in the year 2024. We also saw increases in our ability to sell domestically LPG, to the same customer base and also C4, which these products were sold primarily to the petchem sector. A second area has been our improvement in our logistics and inventory optimization. We've had multiple initiatives and projects here to help us be more streamlined with our costs.
One, including a backload project at Songkhla terminal, which allows us to serve our customers in the South and in the Gulf of Thailand more effectively. A third area is in our optimization of our crude premiums and freight. Enhancing the margin of our crude oil that we use to run our refinery and enhancing our ability to optimize our freight is a large handle in helping us deliver a higher GRM. This also helps us lower our cost to produce asphalt, which believe it or not, on $1 per ton basis is our highest margin product.
It is something that Shashank likes to share often. Finally, process optimization and efficiency enhancement. We continue to be focused on our operations at our refinery at Map Ta Phut, looking for opportunities to optimize our processes, through product quality by monitoring equipment. If it is not profitable to run, we will save the energy from not running it. Then third, from maximizing our production, through our planned maintenance events. With that, I will turn it over to Khun Nutsara for a deeper dive into our financial performance.
I think you might mean me, Matthew. That is okay.
Oh, did I mean Khun Shashank? I am sorry. I will now turn it over to Khun Shashank.
Making sure I am paying attention. Okay. Thank you, Matthew. [Non-English content] everyone. Good afternoon. As you know, I am EVP Commercial for SPRC, so, pleasure to meet some of you outside before we started the session. Just to explain a little bit about the commercial. Everything outside of the refinery operations and the corporate functions like HR, legal, IT, falls under commercial. Things flowing into the refinery and coming out of the refinery is what my team and organization manages. Happy to walk through some of the performance in the second quarter with you here today.
Looking at the first slide, the market performance slide. This basically talks about how the market performed in the second quarter. We look at the Singapore GRM, gross refining margin, and use that as a bit of a benchmark to see how we're performing and how can we drive additional value for our shareholders. Despite some market volatility in the second quarter, I think if you think back, there was some uncertainty around the tariff wars, some global tensions geopolitically.
I think we've managed to sustain a competitive advantage in our refining margin performance. Our opportunity to outperform the Singapore GRM comes from a few areas, and maybe I can explain those in a little more detail. The first is I think our crude diet. Our base diet is largely a Middle East crude program. Q1- Q2, the prices dropped about $10 a barrel, and that was driven by a number of things. I mentioned trade tensions and tariffs, concerns over lower demand as a result.
Combine that with higher supply from the OPEC plus countries. We saw the crude prices actually come down quite a bit in the second quarter. This is offset slightly with the OSP from the Middle East crude sellers going up a bit in the second quarter, specifically for the Murban crude grade, which we run quite a bit of at SPRC. But this will continue with global dynamics and supply/demand balances. That's one area, crude optimization, where we can continue to outperform the Singapore GRM, which is sort of our benchmark, as I mentioned.
Another area is product sales. As Matthew mentioned, we continue to optimize where we sell our products and how we sell them, and the mix of products we produce. To the extent we see an ability to place the products in the higher realized margin channel, we do that. Second quarter, we saw a really good opportunity to place more of our production domestically in Thailand, which provides a better realized value than the Singapore export market. We were able to do that to the tune of 96% so far in the six months this year.
It was higher than the same period last year, also higher than in Q2 versus Q1. That ability to continue to optimize our products, our production, and the placement within the various channels, we believe is a way for us to differentiate and outperform the GRM. The third area, also as Matthew mentioned, logistics and integration benefits. By reducing, and continuing to reduce our cost to serve our customers, making more efficient use of our assets, whether it's terminals, pipelines, or even marine assets, or shifting sales to adjust to dynamic demand conditions.
All that allows us to continue to, hopefully outperform our peers as well as the GRM from Singapore. One of the things I'll mention in this slide, you may have already noticed, we had a bit of a weaker GRM compared to Singapore in the second quarter. Typically, we have a fairly strong performance versus Singapore GRM. So it's a bit lower in the second quarter and there was a few factors. We'll talk about that in more detail, but we had some plant reliability challenges in the second quarter. We had a slightly higher crude premium in the market, specifically March and April of this year, where the Murban OSP was a little bit higher than it has been.
Then in general, the Singapore benchmark GRM assumes a benchmark 20% high sulfur fuel oil yield. When the cracks improve for fuel oil, you see typically an uplift on the Singapore GRM, whereas our high sulfur fuel oil yield at SPRC is only about 3%. So when the fuel oil crack is strong, we will see a worse performance versus the GRM from Singapore. You see some of that in the data on the chart. Maybe go to the next slide, please. This product supply map is starting to paint a bit of a different picture, talking about our continued commitment to meeting national energy needs in Thailand.
As you will see in the pie charts on the right, it shows the percent of the consumption in Thailand that we at SPRC produce. We produced in second quarter 23% of Thailand's gasoline consumption, about 15% of the distillates, diesel and jet. A significant portion of the demand in Thailand is supplied by SPRC, and we continue to be committed to meeting the national energy needs of the kingdom. The other chart, the bar chart, is talking about how we sell our products relative to other suppliers.
You will see over time, focusing just on the second quarter bar chart, about 9.5% of our production was sold directly to consumers and other businesses in Thailand, and that is the retail and what we call the SPRC to business part of the bar chart. Right above that is the SPRC to third party, which is production that we sell to other competitors in the market that then resell the product. The balance is, of course, other suppliers meeting the needs of players in Thailand.
We continue to market about 17%, 18% of the needs of the kingdom, and we hope to continue increasing that dark portion of the bar chart, because that represents a better chance for us to talk with our customers directly, whether it is a business or a consumer, and then therefore extract more margin for shareholders, ultimately in shareholder return. Some of this, when you look at Q1 versus Q2 and into Q3 and Q4, some of that, of how we market our products, does change seasonally as the demand changes and various businesses are investing and buying more or less product.
You will see that fluctuate over time a little bit, but in general, you should see a fairly consistent story and hopefully increasing the margin over time, which is our goal. Move to the next slide on sales performance overview. This chart talks about total enterprise sales volume. I think I was talking to a couple of you outside in terms of maybe we can do a better job of showing how we are marketing our own production. How much of it goes through our own commercial sales organization versus selling to third party, where we realize a smaller margin.
If you look at the six months of 2025 on the far right of that first chart, essentially outside of bulk sales, we define bulk sales as sale to a third party who then markets the product in the market. Everything else is sold and marketed through our commercial sales business. We have about 64% of our production was marketed by our own sales and marketing business. So as that, over time, you will see that bar chart increase to where we are trying to market more and more of our SPRC refinery production through our sales and marketing.
That is one of the areas of optimization and integration benefit that we think, again, differentiates us from a non-integrated downstream company. We will continue to share this with you and maybe provide more detail in a different way in the future. The bottom bar chart talks about our domestic versus export sales. I mentioned this earlier on the GRM. The domestic sales have provided a better realization of margin for SPRC in the second quarter. So we have increased our share of sales domestically from 95% in the first quarter to 97%. But you will notice a bigger jump if you look at one year ago, second quarter or even six months from 2024.
Quite a big jump in how much we have placed domestically, and that is because the domestic market has provided us an opportunity to capture more margin versus Singapore GRM just by exporting. One last picture on the right. One portion of our sales and marketing efforts go into the retail sales network, which is our Caltex branded network of stations, and we have steadily invested to grow that market share and grow that presence. We have added over 100, almost 200 stations in the last few years in the Caltex brand.
Market share in 2023 was about 4.4%, and we have most recently seen that rise to about 5.7%, 5.8% in the latest report we saw. So we continue to see growth in that. We continue wanting to grow that and invest in that portion of our business. We feel that provides the best way for us to provide a stable, reliable return to shareholders as we can monetize that channel of our sales and that channel of production. With that, I will hand over to Khun Nutsara to provide some more overview on the financial performance.
Thank you, Shashank. And glad to meet you in person for this. This is the first time that we have the meeting after the COVID. On the financial performance for second quarter of this year, looking at the enterprise margin, which is the combination of the commercial business and also refinery. You can see that we have enterprise margin of $6.3 a barrel, and this is increase from last quarter. This is because of the strong product crack and the strong product crack from the seasonal demand of driving season, and also the uncertainty in global oil supply from the geopolitical tension in the Middle East.
And on margin for the six months, we have margin at 5.9% comparing to the same period of last year. That is because of the lower crack margin that we have, also slightly impact from the oil spill, the transportation expense that we have in last year. On the enterprise OpEx for this quarter, we have $2.9 a barrel. This is the combination of the refinery OpEx and also commercial, and the number is the same as previous quarter and also the same as last year. For six months of this year, our OpEx slightly increased from $2.7 a barrel to $2.9, and this is actually because of the timing of the expense.
However, we still maintain focus on the cost effectiveness culture and cost saving initiative to ensure that our spending are productive and create the long-term value to the company. One thing to mention is that because of our focus on the cost saving, we anticipate that our operating expense for total year is lower than what we have put in the plan, with our focusing on cost efficiency. The next one is on the consolidated EBITDA and net earning.
Khun Shashank already mentioned that because of the stock loss. So we have negative EBITDA in this quarter and also negative net earning for the quarter also, and that is because of the stock loss. If we adjust the stock loss back to the earning, our net earning for this quarter would have been $15 million, and also $30 million for total year. Meaning that we still perform very good in term of the financial performance. Next slide, please. The next one is on the financial position.
On balance sheet, we still maintain the healthy balance sheet. In term of the total assets slightly decreased from last year because of the decrease in the account receivable and inventory value. This is because of the declining in oil price. In term of liability, also the same, that the number decreased because of oil price declining and impact to crude purchase and crude payable. What we would like to highlight is on our borrowing that at the end of second quarter, we have total borrowing $167, lower than the end of last year. This is because of the cash that we can generate from our strong margin and also from our working capital management.
Looking at the net interest bearing debt to equity ratio, because we were able to generate cash, so our debt to equity ratio is still maintained at low level of 0.2x, which is very low and indicate that we have the strong financial position that enable us to provide us more flexibility in term of the to meet the financial priority and also support the future investment when there is opportunity.
On the dividend payment, we just got the approval from the director last week that we pay the interim dividend of THB 0.15 per share for the first half of this year. Despite we have net loss for the first half, but as we mentioned that after we adjust the stock loss, we still have positive earning and we still focus to provide a stable and steady dividend to the shareholders. This is all the financial summary for the first half of this year. Then I pass to Khun Chaowasri for the looking ahead.
Thank you, Khun Nutsara, and good afternoon again. Today, I would like to focus on the future opportunity, which as Khun Matthew mentioned earlier, we have two strategic pillars, which are optimizing value chain and also profitable growth of marketing business. On the first one, optimizing value chain, we are focusing on strengthening our financial discipline, preserving the cash, and also prioritizing our financial efficiencies. As we prepare for the 2026 turnaround, we ensure that our project readiness to enhance safe and reliable operation and also unlocking the constraint.
Our work project is to have the light crude that enabling us to proceed a higher ratio of the light crude, which is our economic crude. That because of the narrowing of the light-heavy differential of the price, it allows us to produce more jet and gasoline production. Our efforts also extend to deepening the integration with the refinery and petrochemical partners, aiming to capture the synergy value across the supply chain. In parallel, we are exploring the new circular business model and investing in infrastructure to capture the demand of the future trend of the sustainability and also the circular solutions. That is the first one.
On the second one, on the right-hand side, the profitable growth of marketing business. Our spot-to-street strategy is aimed to place our product to retail and highest netback channel, ensuring that we are strategically expanding our retail network to grow with our strategic partner, both our fuel and non-fuel businesses. We continue to reduce our cost to serve to deconstraining our logistic and improve the efficiency of the supply chain.
In addition, we also expand our supply footprint beyond the domestic market by targeting the high netback export channel to expand our value in ASEAN countries by focusing on the term view, as Khun Matthew mentioned earlier, especially for the diesel product, which is in a position of net export for Thailand. Proactive term view of the export will provide a better netback to SPRC. Together, this initiative with the operational excellence, we believe that it will enable SPRC to achieve in terms of the robust financial strength and also compete in the energy market. That is all for our presentation. I would like to hand over back to Khun Voranart for the Q&A.
Thank you, management, for your presentations. Now we are ready to take your question. If you have any question, please raise your hands and our team will bring you a microphone.
Thank you for the presentation. I would like to ask about the cost. In your presentation, I noticed that there is no information on the project cost per the barrel. Could you provide us the magnitude of the extra cost apart from the normal OpEx? Can you break down what are that component of the cost? Is this for the pre-booking for the maintenance cost or anything that make the total cost jumped in the second quarter?
Thank you. For the cost, Khun Nutsara will handle for this question.
Thank you. For the projection for second half of this year that we starting to have the cost incur for the preparation for turnaround next year. We have both in term of the, what we call is the OpEx project and also CapEx project. OpEx project, meaning that it go to P&L directly, and CapEx, that would be capitalized. We also have the expense relating to the T&I maintenance.
So these are three main category that going to impact our performance for second half of this year and also next year. In term of the projection of this year, the number in term of the OpEx, CapEx and turnaround is going to be around, just the approximate number, is around $50 million. The next year is going to be around $80 million-$100 million. In total, the number is, in total for the two periods, in total is around $120 million-$150 million. For this year, the number of $50 million, that could be split around like 30% to CapEx and around 70% to expense.
Because the turnaround is in the first quarter of next year, right? What are the costs that we need to book like in the second quarter? For us, it seems too soon to book the expenses. What are those items?
There is the cost relating to the material that we have to order in advance. We need to book, we need to expense in this year.
My last question on dividends. Assuming that the second quarter, if on operational side you still staying negative, could we expect you to pay dividend for the second half of the year?
Yes, I'll take that question. When we consider our dividends, when the Board considers our dividends, we don't just look at our earnings in any particular one quarter, one half by itself. We actually have a cash flow projection that goes through the cycle. That means that we try to look through the next turnaround cycle and project our cash flow through that item, through that time. Then once we've projected that, we pick a base dividend that we feel confident that we'll be able to deliver, and we're going to deliver that base dividend.
We are going to deliver that dividend. If our performance exceeds what we expect across that time period, as I mentioned earlier, we'll look at the opportunity to provide further dividends or additional dividends or other ways of returning cash to investors. When we make this a determination, we're not looking at our earnings in one half or one quarter. We're looking at our expected cash flow through our entire cycle, and then our Board takes that information, we look at it versus various margin scenarios and cost scenarios, and then we decide, this is how much dividend we'll pay. You can expect us going forward, to be very consistent on having a dividend payment at least twice per year.
Let's say if your expectation for the second half, when the actual numbers come through, and then it is lower than your expectation. It is also possible that the final dividend would be omitted. I'm not sure if I understand correctly.
I would say that we've looked at many scenarios that cover the remainder of this year, next year, and the year following the turnaround, and we don't currently see a scenario in which we would not pay a dividend.
Thank you.
[Khun Apat] please.
Maybe I start from the gasoline output that we have a 25% of our output today. My question is there any way that we can. What is the minimum gasoline output that we can produce? If we are going to change maybe crude slate, or is there any other way that we can reduce the gasoline portion?
Can Khun Shashank?
Yeah, sure. Thanks for the question. Not sure I fully understand. What I am hearing is, what is the minimum percent of our production that can be gasoline, I guess, from the current. The 25% was, the slide was about the percent of domestic consumption and how much of it we produce. But I think in general, from our current slate, we have about ability to reduce our gasoline another, I think 5% production probably, and swing to other products. It is a number of factors.
I think it will be crude slate dependent. It would also be looking at how we operate the units inside the refinery to optimize cut points and things to shift over to, let us say, distillates or even the light end. That is about 5% lower than what we currently make. I do not know, Khun Chaowasri or anyone want to add to that?
As you mentioned, it depends on the crude slate. I think the shifting on the cut is not much changing on the yield much because we mainly are upgrading through our FCC. It's slightly on the couple percent of the yield.
Going forward, you mean that we are going to see our gasoline portion is at about this level? 24%, 25% portion. Because the reason that I ask is we see a structural change in the gasoline now, and the gasoline spread used to be $15, but it's now falling $10 ± . Most of the time it's now below $10. If the EV trend, whatever is going at this pace, we might see gasoline spread staying below $10, and I wonder if we have any plan to minimize gasoline. Is there any way that we can minimize gasoline output?
I guess I'll take this one. It's more of a long-term question I guess you're getting at, and strategically, what do we do about our production profile as the market changes. The way that we see the market today, we just finished a strategic study over the past year. For the next 10- 15 years, we see Thailand continuing to be either balanced or slightly short in its need for gasoline, even with the trends that we see in the uptake in the adoption of EV vehicles. For the next 10- 15 years, we don't really have any plans to structurally change our gasoline yield.
We do have an ability to take a good bit of what we produce as gasoline today and move it into petchem feedstock. But that segment, that petchem sector today is not very strong right now. The best use for those molecules today remains gasoline. If we begin to see out further in time a structural change that really takes away the value of producing gasoline, then we'll look for other uses for those molecules or other configurations in which we can run our refinery to start minimizing our gasoline production. But today, for this coming plan period and that to follow, we don't really see a reason to move that way yet.
If I just sorry, just to add to that, I think apart from the production of gasoline, as Matthew mentioned, our view for the midterm at least is balanced to short. The opportunity for us would be to reassess how we market the gasoline, because currently we sell a lot of our gasoline to third parties. We could potentially sell that ourselves through our Caltex stations and other channels, and that would allow us to continue selling ratably and finding a home for all of our production in a better than Singapore export netback margin. That is another opportunity, is not just make less gasoline, but shift how you sell it. That would allow us to be more flexible.
Another thing that I noticed is 3% of our sales is for export. Is that all gasoline?
No, we did not do any gasoline exports. Most of that export is fuel oil. Isopropyl fuel oil.
Okay. Coming back to the, excuse me, because I have quite a few question. Going back to the cost per barrel earlier, the $2.9 per barrel, does this include the depreciation?
Not include depreciation. This is the OpEx. The OpEx for both refinery and marketing business.
Okay. So remind me, our depreciation is $1, is that right?
Yes. For the refinery. Yes, about $1-$ 1.2.
Okay. I remember that part of our assets will be fully depreciated by this year or next year?
Mid of next year.
How much is that per barrel?
The impact is around $0.40 per barrel. That depreciation would be lower because of the fully depreciated asset.
That will be partly offset by the CapEx that we have for the turnaround. Is that the net reduction or only the fully depreciated part?
No. Actually, the CapEx that we add during the turnaround is not much. We just mentioned that the spending for the turnaround in total is around $120 million- $150 million, and only around 30% is capitalized. So the impact in term of depreciation will be very small.
Okay. So we can assume that by 2026, we should see our depreciation decline by $0.40 per barrel, or maybe at least $0.30 per barrel?
Yes, for total year. But for the first half, the depreciation still continue for the first half. But start fully at the mid of next year.
Okay. Thank you.
If you have any further questions, please raise your hands, and our team will bring you the microphone.
Maybe one more question I forgot. The 3% export, is that all to Cambodia?
No. For the fuel exports, that is sold to the open market, primarily to Singapore.
Okay.
None of it goes to Cambodia.
Okay. Thank you.
I'm having two questions. First one, can I ask on the product yield after the turnaround? Because you're looking to add more light crude. Maybe you can share with us both product yield after the turnaround and also crude mix after the turnaround. That will be my first question. My second question is regarding the RFCCU unit. Can you share more detail on what actually has been happened with this RFCCU unit, which has went through lots of hiccups lately, and what measures that you're looking to do going forward in order to prevent these things happen again?
Okay. Thank you. Khun Matthew will start to answer for these two questions first.
No, I was actually just going to direct traffic for this one. Khun Chaowasri, could you help us with the yield profile just after the turnaround, and then I'll take the question about the FCC.
Our project in the turnaround is the light crude, which allow us to proceed the light crude about 10%-15% higher. That crude slate will produce more jet and gasoline, around 3%-5% higher than our current level.
I will add one thing to that. Another thing that this project allows us to do is today or for most of this year and a good chunk of last year, light crudes were performing really well for profitability for us. We bought a lot of light crude. Our refinery has constraints when we run a lot of light crude, so we are not able to fully utilize the kit. Although it is the most optimal way for us to use the refinery we have it today. With this project in the future, we would expect to be able to more fully utilize the refinery even when we are running a lighter crude slate.
You should see our utilization numbers increase going forward if light crudes continue to perform as well as they have. Now shift to your question on the FCC, because it is an important one for us. SPRC really prides itself on being a reliable operator, and that includes having our equipment run reliably. What you have seen over the past few years with our FCC really comes from two issues. One, we had a really, really, really large turnaround in 2019.
We found that the quality of some of the work done during that turnaround, while it was executed well, on time, on budget, some of the quality or some of the work that was done in the FCC maybe was not up to our standard. That has led to us having a few spots of downtime. That we will fully take care of during this upcoming turnaround. We have recognized where we had those issues, and we have items in scope to make full repairs of those issues.
We do not expect to have any more sort of unplanned turnarounds after this one related to those issues. The second thing that we have had is we had a slate of electrical reliability issues, which also caused our FCC to have to come offline. Those are compounded issues because not only did our FCC have to come down, we actually had to do full thermal cycles of the FCC, and FCCs do not like to be heated up and cooled down. Two things to note there is we think we have a good handle on where the damage has been caused from the thermal cycles, and we will be able to take care of that during this turnaround.
More importantly, we have pretty much been able to attack the underlying issues with our electrical infrastructure. We brought in a team of folks from outside to really help us make sure we could get to the root causes of what was going on with our electrical system, both internal to the refinery and external to the refinery. For a fairly low cost, we have been able to really get at some of those root causes and remove what we would say is probably 85% of the root causes for those electrical hiccups from our refinery.
The remainder 15% will require us to, at some point, do a little bit more work. But the core of what has caused us to have poorer reliability with our FCC over this sort of last turnaround cycle, we think we have got a good handle on it, and you shouldn't see us having these sorts of, I don't want to call it routine, but we have had many sort of unplanned shutdowns at the FCC over this turnaround cycle, and you shouldn't expect that going forward.
Sorry, just a follow-up from [Khun Lang's] question on the light crude. The additional light crude that you would like to take, is this grade equivalent to the Murban, or it is lighter? Because you use Murban very high portion already, so I'm not so sure how you could increase that.
We use a lot of Murban because it's our economic crude. In the evaluation, we see we can increase another cargo of Murban, but in actual life, it's not necessary. It depends on the economy at that time. But this one will open the room and allow us to import any light crude, which is economic at the time that we buy.
Meaning the API is equal to Murban, but with different other types, like more variety? The API level and the sulfur level should be the same as Murban, right? Or it's lighter than Murban.
It can be both lighter or heavier. It depends on the economy. But in terms of the sulfur, we have no constraint on that.
I think I'd go back to my previous point is, we hit constraints. We do run a lot of Murban today, so you say you're already running light crude, and that's true. But we hit constraints before we can fully utilize the rest of the equipment. So what this project really allows us to do is take more crude that looks like Murban, that are lighter. Sulfur constraints can be different.
Sulfur contents can be different or whatnot, but it allows us to take more crude that looks like Murban and be able to run even higher rates through our current equipment. So that's really what we're trying to get at is we're limited to being able to fully utilize our equipment today when we run a crude like Murban. In the future, we'd be able to get full CDU run rates out of a crude that looks like Murban when it comes to API or distillation qualities.
Thank you.
This question is specifically for Khun Nutsara. Out of 70% of $120 million for turnaround CapEx, how much of that has been spent in the first half of this year? What was the expectation that we should have on the second half of this year? Is that going to spill over into Q1 of next year as well? What sort of a distribution of that 70% of $120 million? Thank you.
Actually, in terms of the actual spending for the first half of this year, it's a very small amount, and majority is going to be in the second half of this year and next year. With that 70% of, for example, $120 million, that's the question of 70%, so what portion is going to be spent in this year and next year? The portion is around 30%, 40% going to be spent in this year, and the rest will be spent in next year. In next year first quarter.
Spend this year, you mean expense through P&L? Last question is that, can you give us color on what sort of crude grade that you're planning to add, like 10%, 20% that you mentioned? I mean, we have been asking, but can you give us some guidance, the crude grade that you used in your study? Thank you. Is that equity crude from Chevron or somewhere else? Thank you.
In the study of light crude, we use another cargo of Murban.
If you have any questions, please raise your hands, and we will bring you the microphones. If there is no further questions, today I would like to thank you, everyone, for your time today. We appreciate your interest in SPRC and we appreciate your participation in the meeting today. Please take some moment to conduct the survey for us. Thank you very much.