MANILA, Philippines — Petron Corp. is spending $100 million until next year to complete the upgrade of its refinery in Malaysia and allow it to produce Euro 5 diesel.
The oil company started the diesel hydrotreater (DHT) project in its Port Dickson Refinery to meet the Malaysian government’s environmental standards, Petron president and CEO Ramon Ang said.
“We initiated the DHT modification worth $100 million to comply to the environmental rules of Malaysia,” he said.
The company official said this would allow Petron to produce more environmentally friendly diesel products that comply with Euro 5 specifications.
“We will be able to complete the project next year, in time for the regulation,” Ang said.
Last year, Petron completed the upgrade of its product terminals to comply with the B10 biodiesel and U97 E4M requirements in line with the Malaysian government’s thrust of providing cleaner and more environment-friendly fuels to consumers.
In Malaysia, Petron’s market share has continuously increased since it started operations in 2012, and is currently the third top player next to Petronas and Shell Malaysia.
The Philippines’ largest oil refiner and marketer entered the Malaysian market in 2012 with the acquisition of a 65 percent stake in Esso Malaysia Berhad (EMB), and to purchase subsidiaries ExxonMobil Borneo Sdn Bhd and ExxonMobil Malaysia for $610 million.
Through Petron Malaysia Refining and Marketing Bhd, it operates the Port Dickson Refinery which produces 88,000 barrels of oil per day. It also owns 11 terminals and storage facilities, and has over 650 stations as of end-March.
Petron had previously announced plans to double the capacity of its Port Dickson Refinery by 2020.
In the next three years, the oil firm said it is opening 100 service stations in Malaysia, alongside the 200 new stations in the Philippines.
Petron’s Malaysian operations drove earnings in the first quarter of the year, accounting for P1.2 billion of the P1.3 billion consolidated net income reported during the period, which dropped 77.58 percent from P5.8 billion in the same period last year.
The oil firm attributed the steep drop to the impact of the second phase of the Tax Reform for Acceleration and Inclusion (TRAIN) Act and rising crude prices during the period.