MANILA (AFX-ASIA) – Caltex Philippines Inc said it will convert its refinery in San Pascual, Batangas, south of Manila into a world-class storage terminal.

Caltex said it will import its refined oil product requirements after the closure of the refinery.

“This product import strategy reflects Caltex’s strong determination to be a major supplier of the nation’s energy requirements,” Caltex country chairman Timothy Leveille in a statement.

“This new strategy will transform Batangas into a regional supply and distribution hub where 100 pct of our products will be imported and then distributed under the well-recognised Caltex brand throughout the Philippines.”

Caltex said it will invest more than 750 million pesos for the conversion move, with the terminal expected to be operational by the last quarter of this year. (US$1=55 pesos).

Built in 1954, the refinery produces 72,000 barrels of oil per day. The converted terminal will have a storage capacity of roughly 2.7 million barrels, Caltex said.

Energy Secretary Vicente Perez assured the public of continued oil supply, adding that Caltex’s move does not imply that the Philippines is an unviable place to invest in.

“While Caltex is modifying its business strategy in the region and in the country, we have another oil company, Petron Corp in particular, which has decided on a different tack to invest about US$100 million on its refinery operations,” he said.

Petron is partly owned by Saudi Aramco.

Mr Perez said Caltex has assured it will remain a long-term player in the local industry.

“While there has been a change in its strategy, it is here to stay and will be in constant search for new ventures in the country. Its parent, Chevron Texaco, is also keen on investing in the upstream oil sector,” he said.

Chevron Texaco owns a 45% stake in the Malampaya natural gas project, which is also 45% owned by Shell Philippines Exploration BV. The government, through the Philippine National Oil Co, owns the balance of 10%.

He underscored the need for the country to pay attention to trends in the regional and global oil markets.

“Caltex is doing just this by expanding its storage facilities and aiming to someday transform the country into a regional oil hub given our strategic location in Southeast Asia,” Mr Perez said.

Caltex said its restructuring move will result in job losses, but Mr Perez noted that Chevron Texaco has also indicated its plan to add 200 new jobs in its shared business center in the Philippines.