Petron to invest $1.5 B more to upgrade Bataan refinery

Leading oil industry player Petron Corporation will be investing $1.0 to $1.5 billion more to bring its refinery in Limay, Bataan into a more complex state and move onward into meeting Euro IV fuel quality specifications.

"We're now going to Euro IV even at this early stage, but it entails more investments. We anticipate additional $1.0 to $1.5 billion investments," Petron chairman and chief executive officer Ramon S. Ang said.

Euro IV fuel standards primarily targets to reduce the sulfur content in diesel to at least 50 parts per million.

Beyond meeting more stringent fuel quality, the company is also strategizing to enhance its refining facility's output of high-value white products; and expand its foray into petrochemicals, such as those for polypropylene and high density polyethylene.

Ang indicated that financing plan for the refinery upgrade is already on hand, but they prefer keeping it under wraps for now as a matter of strategy.

He said the investment will be spread over two years; and that timelines of specific project implementation have to be cast in the company's investment blueprint.

Initial capital outlay made by the oil firm for its 180,000 per day Limay refinery was $300 million for its PetroFCC (fluidized catalytic cracker) and that of BTX (benzene, toluene and xylene), propylene recovery units which were already completed. While the Philippine Clean Air Act specified Euro IV fuel quality for the domestic transport by 2012, the basic problem is that the vehicles on the road are not "actually fit" to run on such type of fuel.

To keep up with the proposed fuel standards, the oil refiners are expected to invest a minimum of $400 million to $500 million to install the units that could bring down their emissions as specified for the proposed fuel quality standard. Preliminary numbers rolled set that a refinery with 100,000 to 200,000 barrels per day capacity would need $200 million for the installation of hydrotreater units alone.

The Department of Energy (DoE) cautioned though that several concerns must be seriously weighed before Euro IV standard be prescribed for the industry. One of the concerns is the availability of such fuel quality in the domestic market. And when supply source is scant, would the fuel be sourced easily from neighboring countries in the Asian region.

Source: http://ph.news.yahoo.com/mb/20090903/tbs-petron-to-invest-1-5-b-more-to-upgra-ae83b27.html