Petron cranks up $2-B refinery upgrade

MANILA, Philippines - Petron Corp., the country’s biggest oil refiner, has commenced operations of its $2 billion Refinery Master Plan (RMP-2), its biggest and most ambitious project, with the start-up of one of the plant’s major units. The start-up last Sept. 30 moves Petron a step closer to the plant’s full commercial operations by early 2015.

“This project is a game-changer since it will have positive benefits not just for Petron but for the oil industry and the country as well.  For Petron, this means increasing our revenues while improving profitability. This also gives us the ability to fuel the lives of more Filipinos with our increased capability to supply more world-class fuel products,” Petron chairman and CEO Ramon Ang said.

Ang said that with increased production, the oil refiner would be able to enhance the country’s supply security and further lessen its dependence on higher-cost imported fuel products.

“We will also be the only oil company capable of locally-producing more efficient and environment-friendly fuels that meet or exceed global standards,” Ang said.

Petron president Lubin Nepomuceno said the company is proud to complete the project on time.

“The start-up of this mega-project marks another milestone in Petron’s history. We are proud to have completed this project on time and on budget.  The quick completion of this project is a testament to the professionalism and expertise of the Petron organization,” Nepomuceno said.

He said that normally, similar projects take about 60 months or five years to complete but Petron was able to complete the project in just 44 months.

“The construction phase alone was completed in just 21 months.  At its peak, the project employed around 17,000 skilled workers,” he said.

During the start-up, Petron said it has already “oiled-in” one of RMP-2’s major units, the Vacuum Pipestill 2 or VPS 2 and is scheduled to start up other units over the next few weeks.

In all, the refinery consists of 19 additional process units.

VPS-2 has the capacity to convert up to 47,000 barrels-per-day of negative margin fuel oil to heavy vacuum gasoil (HVGO) and light vacuum gasoil (LVGO), data from Petron showed.

HVGO is fed to the new Petro Fluidized Catalytic Cracking Unit 2 (PetroFCC-2) where it is “cracked” to produce gasoline, jet fuel, and LPG. LVGO, meanwhile, is sent directly to the gasoil hydrotreater (GOHT-4) to produce ultra low-sulfur diesel.

The heavy fuel oil bottoms from VPS-2 are fed to the Delayed Coker Unit (DCU), which produces petroleum coke (petcoke), a product that is similar to coal but with a higher heating value.

The petcoke will be used as fuel for the newly-operational 140 megawatt Refinery Solid Fuel Fired Boiler (RSFFB) Cogen Plant which, in turn, generates steam and power for the 180,000 barrels-per-day Petron Bataan Refinery (PBR), the company said.

Furthermore, the company said that the fully funded RMP-2 transforms Petron’s refinery into one of the most advanced facilities in the region in terms of processing and energy efficiency, operational availability, and complexity.

It would also allow the Petron Bataan Refinery (PBR) to fully utilize its production capabilities by converting all negative margin fuel oil into high-margin products such as gasoline, diesel, and petrochemicals.

Petron’s gasoline production for instance is projected to double from the current 18,000 barrels-per-day to 36,000 barrels-per-day, a development that would change the industry, said the company’s top official.