Petron’s acquisition of 40% stake in Petrochemical Asia opens possibility to further integrate petrochemicals business

13-Jul-10

Oil refiner Petron Corp. has acquired, for an undisclosed amount, 40% stake in Petrochemical Asia (HK) Ltd. (PAHL), with an option to raise its interest to 51%. PAHL is the parent firm of Philippine Polypropylene Inc. (PPI) which operates a polypropylene (PP) plant in Bataan. “This strategic acquisition gives us a unique opportunity to further integrate our petrochemicals business and substantially add to our bottom line," Petron Chairman and chief executive officer Ramon Ang said in a statement on Monday. Nameplate capacity at the PP plant is 160,000 tpa of polypropylene, that can be expanded to 225,000 tons. Feedstock will be provided by Petron’s refinery with capacity to produce 140,000 tpa of propylene. As partial owner of the PP plant, Petron will have its share of the incremental value derived from converting propylene into polypropylene. In a related development, PPI has entered into a technical services agreement during the rehabilitation, commissioning and start-up of the PP plant with Integrated Refinery and Petrochemical Company Public Limited (IRPC), an affiliate of PTT Public Company Limited of Thailand. IRPC owns and operates the largest integrated petrochemical complex in Southeast Asia. It owns several downstream plants which produce olefins, aromatics, polymers and polyols.