Pilipinas Shell to complete Tabangao refinery expansion this year
Pilipinas Shell Petroleum Corp. (PSPC) expects to complete within the year its nearly P1 billion investment in its Tabangao refinery in Batangas to produce bitumen and improve efficiency in its supply and logistics facilities.
The company is targeting to start operations of its P730-million bitumen or asphalt production facility inside the Tabangao refinery in Batangas by the end of the second quarter.
PSPC president and CEO Cesar Romero said the bitumen facility has been mechanically completed in the first quarter and is being tested to produce asphalt.
“It is literally being started up now and we should be ready with bitumen sales, most likely export by the end of the quarter or thereabouts,” he said.
Bitumen is one kind of residue from oil that is being used as a component for making asphalts. Shell is the largest bitumen distributor in Asia-Pacific.
The bitumen facility would allow PSPC to produce bitumen locally to support the government’s infrastructure program as well as to serve demand in the region.
“The facility is big enough to both be an export and domestic facility, we balance both. Southeast Asia as a whole is short on bitumen including probably China so those are the countries that need bitumen,” Romero said
“The bitumen production facility positions Pilipinas Shell to participate in public-private partnerships to build the infrastructure necessary for business and economic growth, as well as export some bitumen raw materials, as appropriate to other countries,” he added.
Alongside the bitumen facility is the ongoing expansion of Tabangao’s supply and logistics facilities, which costs P260 million.
The project will reduce gate-to-gate time of delivery trucks by half, thus contributing to cost efficiency. It is expected to be completed by the last quarter.
PSPC vice president of trading and supply Dennis Gamab said the expansion of the supply and logistics facilities would serve and improve the company’s operations following the closure of the Pandacan depot in 2015.
“We had a fuels terminal that we put up there. We had a small facility there, but of course, we closed Pandacan and we had to move all our operations in the south, that’s what’s driving the expansion in the Tabangao fuels terminal,” he said.
“We’ve completed some, but we’re adding additional gantry…we should be able to reduce tanker time by 50 percent,” Gamab said.
Heightened efficiency is vital in PSPC’s operations with the increase in the throughput of Shell’s Tabangao terminal to as high as seven million liters a day.
The enhanced logistics facilities will also allow independent access to the terminal in case the refinery becomes inaccessible due to traffic or repairs.