Petron planning to expand lease of PNOC property

PETRON CORP. is planning to increase the size of the property it is leasing from the Philippine National Oil Co. (PNOC) to give way for the expansion of its refinery in Limay, Bataan, its president said.

“Ang plano natin mag- expand from 180,000 barrels a day to sana 300,000 barrels a day (Our plan is to expand from 180,000 barrels a day to hopefully 300,000 barrels a day),” Ramon S. Ang, Petron president and chief executive officer, told reporters.

He said cost-wise, the expansion in Limay would be beneficial for Petron, which owns and operates a petroleum refining complex in the Bataan town with a capacity of 180,000 barrels per day. The refinery has its own piers and two offshore berthing facilities. It also has a power plant that serves the needs of the refinery.

Mr. Ang said the refinery expansion would require an additional 100 hectares, some of which could come from PNOC’s property.

“If we can acquire it by lease or acquisition from other people, we will consider to expand the refinery,” he said.

However, portions of the PNOC property being eyed by Petron are occupied by informal settlers, which previously turned off interested parties.

Mr. Ang said he was confident that he would be able to negotiate with the occupants, adding Petron had been able to do the same with some of its leased properties.

“Pag kami ang nag-nenegotiate, we always negotiate on their relocation ( When we negotiate, we negotiate on their relocation),” he said. “Kami, walang problema sa pag- relocate. Willing kami gumastos ( We don’t have a problem with relocation. We are willing to spend).

Mr. Ang declined to disclose the price offered to PNOC for the property. He said he has written the state agency about the offer price, but no reply has been given.

Asked about the capital expenditure, Mr. Ang said the capacity expansion would be between $5 billion to $10 billion for 100,000 barrels per day at the old site, while 200,000 barrels per day on a new site would cost between $15 billion to $20 billion.

He also said a new plant would be ideal if built outside Luzon. He said Cebu would be an attractive site for now, although Mindanao would be ideal.

The Petron chief noted it would be cheaper and faster to expand the old plant than building a new facility elsewhere.

In 2010, the company started its refinery upgrade called the Petron Bataan Refinery Master Plan Phase-2 Upgrade, or RMP 2. This was completed in end-2014.

Petron owns and manages an oil distribution infrastructure with 30 depots, terminals and airport installations and approximately 2,200 retail service stations in the Philippines and 10 product terminals and more than 560 retail service stations in Malaysia.