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Shell prefers to continue its storage depot operations in Pandacan

July 15, 2010 [Business Mirror] - PILIPINAS Shell Petroleum Corp. has hinted it prefers to maintain its depot operations in Pandacan, Edgar Chua, country chairman of the Shell Group of Companies in the Philippines, gave the indication following statements by the Petron Corp. that it was seeking the approval of Shell and Chevron Philippines to join it in moving their storage facilities to the Manila North Harbor.

“We are quite happy where we are [in the Pandacan oil depot],” Chua said.

The present location has a lot of advantages, he said, and they [Shell] only had “a very, very short discussion” with Petron regarding the move to transfer to North Harbor.

Ramon Ang, Petron chairman and chief executive, earlier told reporters he hoped to persuade Shell and Chevron Philippines Inc. to join his firm in relocating their storage facilities to North Harbor.

Chua said Ang may have different reasons for wanting to move the Petron depot to the North Harbor because San Miguel Corp., of which Ang is also chairman, is likewise looking at putting up a grains depot there.

“So they’re looking not just from a fuel-depot point of view. I’m sure there are other drivers for them to make that decision,” Chua said.

He said Shell has other views about the transfer, including the accessibility of the oil firm’s fuel pipeline from Batangas to Pandacan.

But besides the pipeline, Chua also said building a new facility would just make Shell incur additional costs, which it would eventually have to pass on consumers.

“So if we can, we’ll try to avoid incurring additional costs,” he said, even as he recalled that Shell had already scaled down its facilities.

“We’re not looking for other sites now. But. of course, we always have to look at fallback options, as things change in and with time,” he said.

Earlier, the Big 3 said they intended to remain in Pandacan in the meantime and wait for the economically right time” to move. “The future of Pandacan will be determined by economic and market development,” Chua earlier said.

He also said Shell sees the growth of the areas north and south of Manila to naturally result in changes in terms of the supply patterns so, over time, the (pollution) footprint of Pandacan will shrink. Chua said the supply to these areas will be coming from different depots and not just Pandacan.

Eric Recto, Petron president, also said earlier that what will make economic sense will eventually determine what happens to Pandacan. “Unless it [Pandacan depot will be proved to be a health and safety hazard, we will rather let those economic imperatives be the driver of the future of Pandacan,” Recto said.

Chua said pollution and the amount of inventory in Pandacan have already been reduced in the past years. “Thus, even if the Pandacan depot is found to be safe and not polluting, we’ll see over time that the Pandacan oil depot will actually be reduced in size simply because of economic and market developments.”

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Added to TankTerminals.com on: Wednesday, July 21, 2010 by Business Mirror.

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