By Myrna M. Velasco
Publicly-listed Pilipinas Shell Petroleum Corporation has expanded its bitumen market to Vietnam, enabling it to fetch additional revenues from export of such commodity that started in the last quarter of last year, according to a high-ranking company executive.
“In fourth quarter of last year, we made our first export of finished bitumen within the ASEAN region,” Shell Vice President for Finance Jose Jerome Pascual III adding its bitumen export debuted in Vietnam.
Bitumen is a by-product of processes in oil refining, which in turn could be used as raw material in infrastructure development such as roofing or road surfacing, among others.
He noted that their new bitumen facility is “larger than the domestic market, which means that we can supply both the domestic market as well as the export market.”
Shoring up the company’s top and bottom lines may also happen further upon the completion of the installation of a new hydrogen unit that would then enable the company’s refinery to process different crude types – primarily the cheaper ones that are leaning more on the “sour” grade.
At the same time, the planned refining facility revamping will also give the company better bitumen yield that it can add up to both its domestic and offshore markets. “This gives us a lot of opportunity – with the hydrogen optimization we’re doing that will allow us to produce more residue for bitumen as well as diesel. It will enable the bitumen plant to produce the bitumen that’s required both domestically and the market that we see in the region,” Pascual emphasized.
The installation of a hydrogen unit at the company’s refinery in Tabangao, Batangas, according to Pilipinas Shell President and CEO Cesar G. Romero, will require cash outlay of P2.0 billion – and this shall form part of the P6.0 billion capital expenditure (capex) set by the company this year.
“We’re adding P2 billion to provide for the hydrogen project that we are going to do in our refinery,” he stressed, highlighting that the targeted completion of that venture will be end of next year and commercial stream by first quarter of 2021.
He explained, “This is to optimize our crude slate so we can process more advanced or exotic crudes which are therefore cheaper as well as enhance the products that we’re able to produce.” Crude slate would refer to the mix of various crude grades that a refinery can run or process.
“The key there is to be able to find the best match for the demand slate and also relative to the pricing, so we remain open to processing whatever is the best crude at some point in time,” he said; adding that even the option of processing the crude output from the Malampaya field is in their target.
On the capex, Romero emphasized, “In the past, out of the P4 billion capex that we have, P2 billion was for retail network expansion and our non-fuels retail expansion and then P1.0 billion will be for continued refinery enhancement and about a billion is for the rest of our supply chain – our 27 terminals around the country.”