PUMA Energy is embarking on a US$220 million upgrade of the Napa Napa refinery as it ramps up efforts to build Papua New Guinea into a petroleum hub for Asia-Pacific.
Senior Puma executives travelled to Port Moresby in November to announce the expansion plans and officially launch the new branding for its service stations and other retail assets, following the acquisition in July of US$526 million of downstream assets from InterOil.
Napa Napa’s refining capacity will be upped to 42,000 barrels a day and Puma will boost storage volume by 280,000 square metres at terminals in Port Moresby, Lae, Kimbe, Kavieng, Rabaul, Madang and Wewak.
There are also upgrades on the way for the refinery’s jetties, with Bravo to be boosted to be able to receive 160,000 dwt vessels and Sierra upped to 50,000 dwt vessels.
Puma said it was investing in a dedicated bunkering vessel to limit the use of international ports for bunkering.
The company will also install a 10 megawatt gas turbine to capture gas that is currently flared and wasted by the refinery.
Puma said turning PNG into a fuel hub would boost local employment and skills and improve self-sufficiency of supply.
The investment would create multiplied effects for ancillary businesses such as shipping, investment and finance, as well as “creating value-adding activities with positive fiscal implications”.
The company also made reference to the deal’s ability to help PNG on the way to “monetising, rather than exporting, more of the natural wealth of the country”.
“Our investments will help generate jobs, ancillary businesses and other value adding activities,” the company said.
Puma said the refinery would be able to manage a better range of feedstock and recover a greater proportion of gasoil and gasoline with less fuel oil production.
The refinery upgrade would work to debottleneck the refinery and increase its ability to meet domestic demand while producing crude oils and condensates, Puma
Puma has begun the refurbishment of the service station network and has committed to having the overhaul completed by March, though there is no date confirmed for the refinery upgrade to be completed.
Puma chief operating officer for Asia-Pacific and the Middle East Rob Jones said the new branding was the start of an extensive program to bring better facilities and service standards to the company’s fuel terminals, retail service stations and aviation capabilities.
“Under our expansion and improvement program, Puma Energy will bring new services to Papua New Guinea, such as bitumen, bunkering and LPG,” he said.
“We will also be bringing our leading global health, safety and environmental initiatives and programs to all our operations in Papua New Guinea, which are cornerstones of Puma Energy’s global culture.”
At the Port Moresby presentation, Puma outlined its intention to open new service stations, expand storage capacity at terminals, and expand aviation services.
Puma now has 52 service stations, nine coastal storage facilities, 11 airports and two inland depots in its PNG portfolio.
“Our expenditure will bring PNG’s distribution infrastructure to international standards to support the growth of the PNG economy,” the company said.
“This expenditure will bring PNG’s distribution infrastructure to international standards and support the growth of the economy, businesses, individuals and investors.”
Puma said it was also investing in a bottling plant to expand use of LPG, as well as introducing its bitumen products to the PNG market.
“In PNG, we hope to lead the migration away from harmful bitumen drums towards use of bitu-containers and then to bulk facilities once our investment is finished at Napa Napa,” Puma said.
The company said its upgraded LPG investments would help to expand the domestic use of gas to reduce deforestation and the harmful health effects of wood and kerosene burning.
Mr Jones said the plans would bring significant investment to local communities to create jobs, build skills and support the country’s economic growth.
“Puma Energy has always committed and invested wholeheartedly into the communities in which we operate,” Mr Jones said.
“By upgrading the infrastructure we will turn the business into a major petroleum hub for the Asia-Pacific region which will bring many important opportunities to Papua New Guinea.
“We are also helping to build Papua New Guinea’s economic sustainability with our graduate recruitment program, by ensuring employees are given world-class training, and developing local service stations as state-of-the-art facilities.”
Profit boost owing to entry in new markets
Puma released its third quarter results in November, where it celebrated a 31 per cent boost in gross profit compared to the 2013 September quarter.
Puma chief financial officer Denis Chazarain said the company’s profit had increased for the third quarter in a row and the success was owing to increased sales supported by the company’s successful entry into new markets.
“This financial performance and our ability to attract high quality, long term capital as evidenced by our recent private placement of €200 million, demonstrates the support we enjoy for our strategic objectives and integrated business model.”