Petron allots $3.5 B for Malaysia refinery expansion

MANILA, Philippines — Petron Corp. is investing $3.5 billion to more than double the capacity of its refinery in Malaysia by 2020, its top official said.

The company’s expansion entails an additional 90,000 barrels per day for its Malaysian operations, Petron president and COO Ramon Ang said.

“For the Malaysian refinery expansion, if we’re going to add 90,000 barrels a day, that would mean an investment of $3.5 billion,” he said.

Ang visited Malaysia in May last year to meet with government officials regarding the expansion of the refinery there, which will produce petrochemicals and aromatics.

Petron operates the Port Dickson Refinery, seven storage facilities and about 580 service stations. The complex is equipped with a crude distillation unit, a naphtha hydro treating unit, two semi-regeneration reformer units and a kerosene hydro treating unit.

It is further supported by amenities such as waste-water treatment facilities, steam generator, cooling water plant, flare and safety relieving unit, crude storage tanks, refined petroleum products storage tanks, as well as spheres for liquefied petroleum gas (LPG) storage.

When the Malaysian refinery was acquired, Ang said it had an earnings before interest, taxes, depreciation and amortization (EBITDA) of $20 million.

Since then, Petron Malaysia has had a stellar performance, which is expected to churn out an EBITDA of $270 million by end-2017.

“Once the expansion is completed, we are projecting an EBITDA of $600 million a year from $20 million,” Ang said.

At home, Petron is looking to invest $5 billion to raise the capacity of its Bataan refinery in three years.

From the current output of 180,000 BPD, the expansion project entails a new 90,000 barrels per day (BPD) capacity amounting to $1.5 billion and another 90,000 BPD worth $3.5 billion.

Petron targets the first expansion project in 2018 to be completed by 2019. Meanwhile, the next expansion project can start in 2019 and finish by 2020.

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 2017, Petron reported a consolidated net income of P11.8 billion, up 58 percent from P7.4 billion in 2016.