Petron expects expansion deal in Malaysia done in 2020

MANILA, Philippines – Listed Petron Corporation expects its refinery expansion in Malaysia to be finished in two years, adding 90,000 barrels a day to its capacity.

Petron Malaysia Refining & Marketing Berhad operates Petron Port Dickson refinery, which has a capacity of approximately 88,000 barrels per day.

“If [the expansion] is a go, it will be finished in year 2020. The Malaysian expansion, if we will add 90,000 barrels a day, then it would cost $3.5 billion,” said Petron president Ramon Ang.

Petron Malaysia has a range of petroleum products, including gasoline, diesel, liquefied petroleum gas, industrial and commercial fuels, as well as aviation fuels.

The firm’s fuels are distributed from 8 depots and terminals. It operates over 560 retail service stations across the nation.

Petron Malaysia, according to Ang, is “number 3” in terms of market share. (READ: Petron to start $20B oil refinery in early 2018)

Back in 2012, Petron announced its acquisition of a 65% stake in Esso Malaysia Berhad (EMB).

During that year, Petron also signed a deal to buy subsidiaries ExxonMobil Borneo Sdn Berhad and ExxonMobil Malaysia for $404 million, bringing its total transaction to $610 million.

“The business in Malaysia is going well. We bought it when its EBITDA [earnings before income tax depreciation amortization] is $20 million. This year (2017), we will end at $270 million in EBITDA,” Ang said.

“With the expansion, it should give us $600 million a year from $20 million,” he added.

Local expansion plans

Back in its hometown, the Philippines, Petron is also eyeing another expansion project.

The oil refiner is set to start its 1st expansion plan this year, which will bring the capacity to 180,000 barrels a day, from the current 90,000 barrels a day. This plan is earmarked to cost Petron about $1.5 billion.

Ang also said there is a 2nd local expansion project in the pipeline, adding another 90,000 barrels a day to its capacity. If realized, this would mean a total of 270,000 barrels daily capacity for Petron.

“If we’re going to add another 90,000, that would be $3.5 billion because the first expansion is just a de-bottlenecking project of the existing refinery. The next expansion will be like a totally new refinery,” Ang said.

Petron expects another banner year in 2017, fueled by strong sales volume as well as operational efficiency with increased crude run at higher product yields.

In the 1st 9 months of 2017, Petron saw its consolidated net income go up by 58% to P11.8 billion.

Local and Malaysian operations sales volumes hit 80.2 million barrels in the 1st 9 months of 2017, which was a bit higher than the 79.3 million sold in the same period in 2016. – Rappler.com