Shell Philippines ceases Batangas refinery ops, converts into import terminal

Shell Pilipinas is transforming its Tabangao Refinery in Batangas into a world-class full import terminal to optimise its asset portfolio and enhance its cost and supply chain competitiveness, it said,  amid the onslaught of the Covid-19 pandemic to major businesses. In bid to strengthen the company’s financial resilience amidst the significant changes and challenges in the global refining industry and the shift to the new normal brought about by the pandemic, it is ceasing oil refining activities in Tabangao. “ It is no longer economically-viable for the company to run the refinery, according to Pilipinas Shell President and CEO Cesar Romero.

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The Tabangao Refinery has been on shutdown since May 24 to help insulate the company from further deterioration of refining margins, and aid in its cash preservation efforts.

The regional refining margins, which have been weak for some time due to the oil supply/demand imbalance in the region, have worsened due to demand destruction from the covid crisis, the company stated. Meanwhile, the company is transforming its Tabangao unit into a world-class import terminal. It will as well continue to cater to the fuel needs of Luzon and Northern Visayas, Romero assures. Meanwhile, the North Mindanao Import Facility (NMIF) in Cagayan de Oro will serve the growing energy needs in the balance of Visayas and Mindanao region, he adds.

Romero said that the conclusion of refining operations will not affect Pilipinas Shell’s capability to supply high-quality fuels as the shift in supply chain strategy from manufacturing to full import-based.