Thursday, June 21, 2007 Oil company to build small refinery in Mindanao
INDEPENDENT oil player Eastern Petroleum Corporation (EPC) and its Hong Kong based-partner plan to put up a mini oil refinery in Mindanao.
EPC chairman Fernando Martinez said during a luncheon briefing that the refinery will produce at least 800,000 barrels to one million barrels a month and is part of the company's three to five-year work program.
Martinez said he has initiated talks with possible investors of the proposed oil refinery, which will benefit oil consumers in Visayas and Mindanao.
"Once operational, oil prices in Mindanao and Visayas would likely go down by at least P1 per liter or may put at par with Manila prices," he added.
Oil prices in Mindanao and Visayas are higher by P1.50 per liter than the price of gasoline sold in Metro Manila prices due to transport/freight costs. The oil refinery would take only one and a half years to build.
"At least it will be crude based, and remember there is a huge margin in refinery between refinery and crude which is about US$12 to US$18. It will be cost effective to refine everything here. We are currently verifying the costs," he said.
"We are aware that only 70 percent of the existing capacity is being utilized by the domestic market but if it would be cheaper for us to refine than importing crude oil, we might as well do it here," he added.
Martinez said the company is pursuing the project because it is "viable and is not pre-conditioned to any tariff differential."
At present, there are only two refineries in the country – the Petron Corporation refinery in Bataan, which produces 180,000 barrels per day, and the Pilipinas Shell Petroleum Corporation refinery in Tabangao, Batangas, which produces 110,000 barrels daily. (MSN/Sunnex)
