Petron refinery expansion seen completed by 2020

By Lenie Lectura -  January 1, 2018

https://businessmirror.com.ph/petron-refinery-expansion-seen-completed-by-2020/

THE refinery expansion of Petron Malaysia Refining & Marketing Bhd. could be finished in two years, its top official said.

“If it is a go, it will be finished in year 2020,” Petron President Ramon Ang said. “The Malaysian expansion, if we will add 90,000 barrels per day [bpd], then it would cost $3.5 billion.

Petron Malaysia operates Petron Port Dickson refinery, which has a capacity of approximately 88,000 bpd, producing a range of petroleum products, which include gasoline, diesel, liquefied petroleum gas (LPG), industrial and commercial fuels and aviation fuels. Its fuels are distributed from approximately eight depots and terminals.

The company also operates over 560 retail-service stations across the nation.

It offers Blaze 95RON, Blaze 97RON Euro 4M and Diesel Max. Its LPG brand, Petron Gasul, provides energy in over 12 kilograms (kg) and 14 kg for households. It also offers a range of industrial fuel products, including Automotive Diesel Oil, Mogas, Kerosene and Jet A1. Its service stations also provide convenience stores with amenities, such as shopping marts and fast-food restaurants.

Ang said Petron Malaysia is “No. 3” in terms of market share.

In 2012 Petron announced its acquisition of a 65-percent stake in Esso Malaysia Berhad. It also signed a deal to buy subsidiaries ExxonMobil Borneo Sdn Bhd and ExxonMobil Malaysia for $404 million, bringing the total transaction to $610 million. Rebranding and upgrading programs commenced in the same year.

“The business in Malaysia is going well. We bought it when its Ebita [Earnings before interest, taxes, depreciation and amortization]  is $20 million. This year [2017], we will end at $270 million in Ebita,” Ang said. “With the expansion, it should give us $600 million a year, from $20 million.”

In the Philippines Petron is also planning another expansion of its refinery.

Petron will start the first expansion program next year, bringing the capacity from the current 90,000 bpd to 180,000 bpd. This will cost the company $1.5 billion.

Ang recently announced another expansion that involves expanding the capacity by another 90,000 bpd to a total of 270,000 bpd. He said the second expansion may cost $3.5 billion and could be finished by 2020.

“We can add another 90,000 barrels per day later on, we can ramp up the capacity or to produce more petrochemical,” Ang said. “If we’re going to add another 90,000, that would be $3.5 billion because the first expansion is just a debottlenecking project of the existing refinery,” he added. “The next expansion will be like a totally new refinery.”

Last year Petron commissioned the $2-billion Refinery Master Plan 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 expected another banner year in 2017 due to robust sales volume, operational efficiency with increased crude run at higher product yields, and effective risk management.

At end-September last 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.