San Miguel's P1-trillion petrochem facility to break ground by end-2017
MANILA, Philippines – San Miguel Corporation (SMC), the parent firm of the country's biggest oil refiner and retailer, is set to break ground on its single biggest investment in the Philippines so far: a new petrochemical facility worth $15 billion (P745.46 billion) to $20 billion (P993.95 billion) in the south of Manila.
SMC president and chief operating officer Ramon Ang said his company, along with two foreign partners, plans to break ground in the next 6 months.
"We have signed a non-disclosure agreement with them so we cannot say further. But what I can tell you is that it will be integrated – from crude oil to petrochemicals," Ang told reporters after SMC's annual stockholders' meeting in Pasig City on Tuesday, June 13.
Ang said the oil refinery will mainly produce petrochemicals, with a capacity of 250,000 barrels per day. According to him, the company will need "at least 1,000 hectares for the project."
"Petron Corporation's refinery is already in the northern part of Luzon, so you don't want to put all eggs in one basket," the SMC president added.
Ang also said the construction period for the greenfield project will take 2 to 3 years. They are looking at 30% equity and 70% loan for project financing.
Once done, Ang said his company will export the petrochemicals and by-products to the rest of the world. "World market potential for petrochemicals is very, very high, so we are gearing up for that."
"Petrochemical products are more stable and more profitable," he added.
Petron, SMC's subsidiary, has another oil refinery in Limay, Bataan, which it also plans to expand. Petron had earmarked a total of $500 million (P24.86 billion) to upgrade its refinery in Bataan.
The Petron Bataan Refinery is the country's largest integrated crude oil refinery and petrochemicals complex to date. Inaugurated in 1961 with a capacity of 25,000 barrels per day, it has grown to its current rated capacity of 180,000 barrels per day.
Other than the Bataan plant, SMC plans to spend at least $1.5 billion (P74.57 billion) to expand the capacity of its oil refinery in Malaysia to 150,000 barrels a day from 88,000 barrels a day.
Ang said the Malaysian market is promising, with a population of about 25 million consuming around 600,000 barrels a day.
Petron acquired in 2011 Esso Malaysia's Port Dickson refinery and fuel retail network in Malaysia. – Rappler.com