Corporate News

Shell refinery upgrade, terminal to cost P12B

Posted on December 03, 2013

PILIPINAS Shell Petroleum Corp. is investing a total of P12 billion on two projects -- one in Luzon and another in Mindanao -- as part of the oil company’s expansion amid the country’s growing economy, a top official of the company yesterday said.

“We just broke ground on a P6-billion import terminal in Mindanao and we are waiting for the approval of P6 billion to upgrade our refinery,” Edgar O. Chua, country chairman of Shell Companies in the Philippines, yesterday said in his acceptance speech as awardee of the “Management Man of the Year 2013” conferred by the Management Association of the Philippines in Makati City.

Mr. Chua told reporters on the sidelines of the event that the Northern Mindanao Import Facility is located in Cagayan de Oro City, Misamis Oriental.

“The country is growing and I think we need to spur the economy in Mindanao [which] I think is actually a good place to put an investment in,” he said, when asked why the company decided to build an import facility in the south.

He said the Mindanao facility will be built for products like “mogas (motor gasoline), diesel and even probably jet fuel.”

The other project, Mr. Chua said, is to upgrade Pilipinas Shell’s oil refinery in Tabangao, Batangas “to meet more stringent quality specifications in the future,” referring to Euro 4 standards. Euro 4 is a globally accepted European emission standard for vehicles which require fuel with lower sulfur (up to 0.005% or 50 parts per million) and benzene (up to 1%) content.

In 2010, the Department of Environment and Natural Resources issued Administrative Order No. 2010-23 requiring all vehicles that will be introduced in the market by Jan. 1, 2016 to comply with Euro 4 emission limits, subject to Euro 4 fuel availability. Currently, the Philippine standard for automotive gasoline allows up to 0.05% sulfur and up to 2% benzene.

Mr. Chua also said in his speech that Pilipinas Shell plans “to build the first LNG (liquefied natural gas) import facility,” but did not elaborate.

He added the company will hire 1,000 personnel next year “to support Shell’s operations around the world,” bringing staff in its shared service center in Manila to 5,000 people. According to Pilipinas Shell’s Web site, the center provides processing services related to finance, human resource management, procurement, customer service and other business needs of Shell units worldwide.

Pressed for updates on the firm’s long-awaited plan to go public, Mr. Chua replied: “Let’s wait for the upgrade of the refinery first before we discuss that.” -- DEDS