Shell PH suspending Batangas refinery operations for 1 month

Pilipinas Shell Petroleum Corp. will shut down its refinery operations in Batangas for a month starting mid-May as demand for petroleum products declined drastically due to the lockdown imposed by the government to prevent the spread of COVID-19.

In a disclosure on Tuesday, Pilipinas Shell said it would temporarily close its 110,000-barrel-a-day Tabangao refinery in Batangas City and switch to full importation of petroleum products to maintain supply.

“In response to the drastic decline in local product demand and the significant deterioration of regional refining margins brought about the COVID-19 pandemic, the company will temporarily shut down its refinery operations for about one month starting mid-May 2020,” it said.

“The company has prepared itself by building the flexibility to switch from refinery production to full import of petroleum products, and therefore safeguard the continuous and cost-effective supply of high-quality fuels to the country,” it also said. Shell was referring to its North Mindanao import facility (NMIF). It said the strategy would help insulate the company from further potential drops in refining margins, while also aiding in its cash conservation initiatives. “The company will also use the refinery shutdown as an opportunity to conduct proactive maintenance activities in the refinery while we reassure the public that we comply with the minimum inventory requirements of the government,” Shell said.

Shell said the refinery could do a startup immediately should market and demand conditions improve and stabilize.The Tabangao facility is one of the two refineries in the country. The other is Petron Corp.’s 180,000-barrel-per-day facility in Bataan. “The joint operations of the NMIF and the refinery as import terminals, coupled with the company’s resilient and efficient supply chain, will help ensure that the supply of Shell fuels remains uninterrupted to serve the needs of the Filipinos,” the company said. INQ