Petron spending $5 B to double Bataan refinery output in 3 years

MANILA, Philippines — Petron Corp. is investing $5 billion to double the capacity of its Bataan refinery in three years, its top official said.

Petron president and CEO Ramon Ang said the oil refiner would expand the capacity of its refinery by an initial 90,000 barrels per day (BPD) and another 90,000 BPD from its current 180,000 BPD output.

This is instead of putting up a new refinery away from the Bataan facility.

“For our next refinery expansion, we will be adding another 90,000 BPD. So from 180,000 BPD, we will be hitting 270,000 BPD,” he added.

“We can add another 90,000 BPD later on, we can ramp up the capacity or to produce more petrochemical,” he said.

Ang said this would entail a total investment of $5 billion — $1.5 billion for the first 90,000 BPD phase and $3.5 billion for the expansion phase.

“The next expansion, if we’re going to add another 90,000 BPD, that would be $3.5 billion because the first expansion is just a de-bottlenecking project of the existing refinery. The next expansion will be like a totally new refinery,” he said.

Petron will start the initial expansion next year, which can be completed by 2019. Meanwhile, the next phase can start in 2019 and finish by 2020, the Petron chief said.

Earlier, the company said it is looking at building a new refinery south of its Bataan facility — possibly in Bicol and Cebu.

However, it decided to raise the output of the existing refinery to save on cost and time.

Last year, Petron commissioned the $2-billion Refinery Master Plan 2 (RMP-2), allowing it to produce more high-value fuels and petrochemicals. It said costs have gone down since its 180,000 BPD Bataan refinery can now process cheaper crudes.

The upgrade is expected to foster Petron’s profitability toward end-2016 and this year due to improved margins from the upgrade of its refinery, despite the continued drop in global crude prices.

Petron expects another banner year in 2017 due to robust sales volume, operational efficiency with increased crude run at higher product yields, and effective risk management.

For the nine months ending September this year, Petron reported a consolidated net income of P11.8 billion, up 58 percent from P7.4 billion last year.

Local and Malaysian operations sales volumes hit 80.2 million barrels – slightly higher than the 79.3 million sold in the same period last year.

In 2016, Petron’s net income amounted to P10.8 billion, up from P6.3 billion in 2015.