Petron to start work on P6-B facility

Publicly listed Petron Corp. is expected to start the construction of a P6-billion isomerization plant and a gasoil hydrotreater early this year as part of its commitment to meet requirements of the Clean Air Act.

Petron said, that if they proceed according to schedule, the project would go one line by 2003.

However, the company said they are not sure when the project will actually go on full blast since the unfavorable business climate has made the sourcing of its investments uncertain.

The construction of the plant and hydrotreater is one of the options being explored by the company to meet the more stringent requirements in 2003 and 2004 of the CAA. Petron said the CAA specifications, will entail either higher impost cost or additional refinery investments such as this plant and hydrotreater.

With the P6-billion investment cost, prices are expected to rise P2 per liter for unleaded gasoline by 2003 and P2.80 per liter for diesel by 2004.

The first stage of the CAA became effective last Dec. 23 with the total phaseout of leaded gasoline in the country. This will be followed by the reduction of the sulfur content in automotive diesel to 0.20 percent and industrial diesel to 0.30 percent in January 2001.

Petron said it has been preparing for the first phase of the CAA since 1999 with major investments in facilities such as the continuous catalytic reformer unit (CCR) which increased its capability to produce more unleaded gasoline in line with the phaseout of leaded gasoline.

The top oil company said it is also ready to meet the lower sulfur content mandated next year in automotive diesel (0.20 percent) and industrial diesel (0.30 percent). These fuels, it said, will be produced through some changes in its refinery.

The country’s oil companies, especially their refineries, are forecast to invest approximately P80 billion for the implementation of RA 8749, the Clean Air Act over a number of years.

Last year, Petron infused some P20 million for the reduction of the sulfur content of its diesel products from one percent to 0.05 percent. It is reported to be one of the lowest sulfur content requirements on diesel products anywhere in the world.

Last April, all leaded gasoline products were withdrawn from all service stations in Metro Manila in compliance with RA 8749.

Affected by this CAA provision were the 21 oil companies, which completely phased out leaded gasoline from the market.

To encourage swift compliance with the law, government has reduced the excise tax on unleaded gasoline by P1 per liter. Unleaded gasoline presently accounts for 45 percent of total gasoline sales in service stations.

Petron is presently marketing XCS premium plus, regular unleaded gasoline and diesel from its previous four-line products of diesel, regular (leaded), unleaded gasoline and diesel from its previous four-line products of diesel, regular (leaded), unleaded and premium XCS.