Shell to complete refinery upgrade by yearend

Pilipinas Shell Petroleum Corp., is on track to complete its refinery upgrade by yearend, in time for the 2016 implementation of the Euro IV grade diesel and gasoline.

Shell owns a 110,000 barrels per day refinery in Batangas, which the company is in the process of upgrading to meet Euro IV standards.

The Euro IV standard is a globally accepted European emission standard for vehicles. The standards require fuel to have significantly low amounts of sulfur and benzene.

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 up to $150 million, according to the Department of Energy.

“We are on schedule,” said Shell country chairman Ed Chua.

Chua said depending on the demand, the company may produce all Euro IV products by the time the upgrade is completed.

“If our sales increase beyond the refining capacity, then we have to import,” he said.

He estimates initial import volume at 20 percent of total sales.

For its P6 billion import facility in Northern Mindanao, Chua said this would be ready by October, ahead of the yearend schedule.

“It’s advanced because originally we planned that end of the year but the contractor is doing very well,” Chua said.

The terminal would be able to serve existing businesses in Mindanao and the wide array of industries which are likely to boom in the region with the government making headway in the peace process.

In March last year, the government and the Moro Islamic Liberation Front (MILF), the country’s largest Muslim rebel group have signed a historic peace pact that is seen to end decades-old conflict in the region.

The Mindanao terminal will be able to store main fuels such as gas, diesel and jet fuel.

Shell has oil depots around the country and has another terminal in Batangas.

Shell, meanwhile, has commenced demobilization of its Pandacan depot after the Supreme Court ruled with finality that the depot must be shut down.