Shell refining upgrade affected by port congestion

MANILA, Philippines - The ongoing refinery upgrade of Pilipinas Shell Petroleum Corp. in Batangas has been affected by the port congestion triggered by a truck ban imposed by the city government of Manila in February last year.

The completion of Shell’s refinery upgrade has been delayed by one quarter due to port congestion, Energy Undersecretary Zenaida Monsada said.

“Shell will be delayed by one quarter because  equipment cannot be released immediately (due to port congestion),” Monsada said. 

Shell, the local subsidiary of energy giant Royal Dutch Shell, owns a 110,000 barrels per day refinery in Batangas, which the company is upgrading.

Shell officials declined to comment on the matter.

The company has not given a definitive timetable for the completion of the project but the Energy department expects Shell to finish the upgrade in time for the 2016 implementation of  ‘Euro IV (PH)’ grade diesel and gasoline set to take effect by January 2016.

Euro IV compliant fuels have a significantly lower sulfur content of 50 ppm (parts per million) compared to the current Philippine standard of 500 ppm.

The refinery upgrade may cost $100 million to $150 million, according to data from the Energy department.

The truck ban was lifted in September but congestion at the ports of Manila has yet to fully ease.

Energy Secretary Carlos Jericho Petilla has said that Shell’s decision to maintain and upgrade its refinery in Tabangao, Batangas is a reflection of its confidence in the Philippines.