Bidding for $2.1B BatMan 1 project delayed anew

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02:58 AM February 25th, 2013

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By: Amy R. Remo, February 25th, 2013 02:58 AM

The bidding for the first phase of the $2.1-billion Batangas-Manila (BatMan 1) natural gas pipeline project may be delayed anew as the state-run Philippine National Oil Co. (PNOC) has yet to conduct a study to determine the most feasible mode for the project.

According to Zenaida Y. Monsada, director of the Oil Industry Management Bureau at the Department of Energy, PNOC is now preparing for a feasibility study that will look into the merits of various options being considered by the government.

One option is to bid out the BatMan 1 project, a critical infrastructure that can boost the Philippines’ natural gas industry, under a public-private partnership (PPP).

Another mode being considered, according to Monsada, is through an official development assistance (ODA), which is defined as a “loan or a grant administered with the objective of promoting sustainable social and economic development and welfare of the Philippines.”

Under the law, ODA resources must be contracted with governments of foreign countries with whom the Philippines has diplomatic, trade relations or bilateral agreements, or which are members of the United Nations, their agencies and international or multilateral lending institutions.

“There are prospective volunteers who can conduct the feasibility study and we’re studying [their proposals],” Monsada told the Inquirer.

“Their offers differ in terms of the timetables as to how long the study will be conducted and the scope of the study. There are groups that have offered to conduct the feasibility study for free but we have to look into their proposals first.”

Once the study is completed, PNOC may already be able to proceed with the bidding for the first phase of the BatMan 1 project, which will involve the construction of the 100-kilometer pipeline.

PNOC has yet to announce whether it will still create a separate subsidiary to be called PNOC Pipeline Corp. (PNOC PC) to handle the operations of the natural gas pipeline.

Based on previous plans, the PNOC PC is expected to bid out the engineering, procurement and construction contract, as well as the technical and maintenance agreement this year. It will take about three years to finish the pipeline.

The second and third phases of the Batman 1 project will involve the construction of the receiving terminal and power plant, respectively.

The Philippine government is bent on pursuing the use of alternative fuels, such as natural gas, given the current global oil price volatility, to which the Philippines is highly vulnerable.

The country sources more than 90 percent of its fuel requirements abroad.

Natural gas has been deemed to be among the more feasible alternatives that will allow the Philippines to diversify its energy and transport fuel sources.

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