Petron to double Bataan refinery capacity

MANILA, Philippines — Petron Corp. is looking to nearly double the capacity of its existing Bataan refinery after it made an offer to Philippine National Oil Co. (PNOC) to develop the 220-hectare energy city government property in Limay, Bataan.

The company has submitted its plans to develop PNOC’s Bataan property in the interest of using the land for its expansion since it is adjacent to its existing refinery, Petron president and CEO Ramon Ang said.

 “Our plan is expand our existing capacity from 180,000 barrels a day to around 300,000 barrels a day. If we can secure this property, then we can use that for our expansion. If we can expand in this existing plant, it will be faster and cheaper,” he said.

Originally, Petron plans to put up a new refinery south of the existing Bataan refinery, possibly in southern Luzon, Visayas or Mindanao.

The new refinery would have an investment of between $15- to $20-billion and a capacity of 250,000 barrels per day.

But Petron would generate more savings and construction would be faster if the expansion would be in the old site, Ang said.

“The required property for this expansion is about 100 hectares, of which some can come from PNOC and most of the other properties are owned by other people which, if we can acquire it by lease or acquisition, we will consider to expand the refinery,” he said.

Petron is also willing to relocate the informal settlers in the PNOC property.

“When we negotiate, we always negotiate on their relocation. So we don’t have problems with the informal settlers issues, we’re willing to shell out,” Ang said.

However, he said all these expansion plans are stalled by the stand-off between Petron and PNOC on the renegotiation of land lease agreement where the oil firm’s 24 bulk plants and 67 service stations are located.

Earlier, PNOC president Reuben Lista wrote a letter to ask Ang to decide on renewing and raising rental fees in its land lease contract for its service stations and bulk plants which will expire in August 2018.

A year before the expiration of the contract, Petron should have conducted environmental impact studies and submitted remediation plans for its service station and bulk plant properties.

PNOC has also asked Petron to nullify certain provisions of the existing lease agreements “that pose a stumbling block” before proceeding to re-negotiate the renewal because existing rates are disadvantageous to government.