Shell President and CEO Cesar Romero said that decision to cease refining activities at Pilipinas Shell was taken with a ‘heavy heart’, but that it is no longer economically viable to run the refinery
As a result, Pilipinas Shell will convert its 110,000 bpd Tabangao Refinery site in Batangas City in the Philippines into a ‘world class’ import terminal for fuel products.
Pilipinas Shell shut down the refinery on 24 May, 2020 as it sought to save money. Demand for petroleum products in the Philippines fell by 20-30% in March and by as much as 70% in April compared to February 2020, as a result of the COVID-19 pandemic.
Fuel demand is still far below normal levels and Pilipinas Shell does not expect demand to recover soon. The company also says that refining margins, which declined steeply earlier in the year, continue to decline, and it believed they may remain depressed in the medium term.
Pilipinas Shell said that converting the site to an import terminal will strengthen its financial resilience as the global refining industry adapts to the challenges of COVID-19.
The new import terminal will continue to meet the fuel needs of the Luzon and Northern Visayas areas of the Philippines. Romero said that the company will still be able to supply high-quality fuels despite the shift in manufacturing to imports. The company pledged that affected employees will be “well taken care of.”
Romero said: “Nonetheless, it is with an equally invigorated spirit that we reveal our plans to transform Tabangao into a world-class import terminal – one that will sustain and grow Pilipinas Shell’s competitive advantages that have continuously evolved to stay relevant with the times ever since we started our business in the Philippines 106 years ago.”
For more information visit pilipinas.shell.com.ph
