Petron Malaysia Bhd Plans $650 Million Diesel Hydrotreater Upgrade

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Researched by Industrial Info Resources (Sugar Land, Texas)--Petron Malaysia Refining & Marketing Berhad (KLSE:PETRONM) (Kuala Lumpur, Malaysia) intends to continue capital investments to enhance the facilities at the Port Dickson Refinery, more than a year after its acquisition of ExxonMobil's (NYSE:XOM) integrated downstream business in Malaysia on March 23, 2012. Petron Malaysia is planning to add a diesel hydrotreater and modify its naphtha hydrotreater to comply with the Malaysian government's EURO-4M mandate to produce clean fuels in the next three years. The planned diesel hydrotreater will process 15,000 barrels per day (BBL/d), and it is scheduled to begin commercial operations by 2016.

Malaysian equivalent Euro-4M Gasoline and Diesel Benzene specifications is 3.5% by volume, greater than the standard Euro 4 maximum benzene content of 1% by volume. Euro-4M Sulfur specifications in diesel and gasoline require a maximum of 50 parts per million (ppm), similar to the standard EURO-4 requirement.

To address the new gasoline requirements, Petron is planning to add a reactor to its existing straight-run naphtha hydrotreater. The modified unit is scheduled to begin operations at the same time as the diesel unit on 2016. About $650 million will be spent over the next two years to enhance refinery equipment and produce fuel products that meet EURO-4M specifications.

Petron is investing another $95 million on rebranding and expanding its retail network of 550 "Esso" and "Mobil" service stations in Malaysia. Several capital expenditure projects that would allow the refinery to operate its equipment at their designed capacity also are being considered.

Ramon Ang, Petron's chairman and chief executive officer, is enthusiastic about the investments. "We will continue to rebrand our service stations while aggressively expanding our retail network over the next few years," he said. "We will also invest a significant amount to upgrade our Port Dickson Refinery and enhance its efficiency."

The Port Dickson Refinery, located near Kuala Lumpur, has a capacity of 88,000 BBL/d and produces liquefied petroleum gas, gasoline, jet fuel, diesel, low-sulfur waxy residue, and other products. Most of the refinery's products are consumed within Malaysia. Petron Malaysia is a subsidiary of Petron Corporation (PSE:PCOR) in the Philippines.

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