PNOC EC to bid out CNG station contract in January


03:46 PM December 24th, 2012

By: Amy R. Remo, December 24th, 2012 03:46 PM

PNOC Exploration Corp., the upstream oil and coal arm of state-run Philippine National Oil Co., targets to bid out by January next year the contract to provide modular units for the planned compressed natural gas station in Mamplasan, Laguna.

This will allow the winning bidder to start as soon as possible the necessary civil works to complete the CNG refilling station before the election ban takes effect next year, according to Evelyn Reyes, director of the Energy Utilization Management Bureau (EUMB) of the Department of Energy.

Reyes explained that PNOC EC decided to put up a mobile, modular CNG station in another location in Laguna to replace the existing daughter station of Pilipinas Shell Petroleum Corp., instead of simply retrofitting it. Another mobile CNG station is also being planned in Batangas City.

The original plan—when the government signed an agreement with Shell early this year to take over the oil firm’s CNG mother and daughter stations—was to simply replace the technology used in the daughter station. It should be recalled that the technology used by Shell was partly blamed for the company’s inability to provide adequate CNG supply to bus owners.

However, there was a dispute over the current site’s leasing rates, which PNOC EC deemed high, Reyes said.

It was also deemed more prudent to select another location that charges lower rental rates since PNOC EC would be putting up new equipment using the latest in CNG technology which might require bigger investments. Based on initial estimates, retrofitting Shell’s existing refilling station would require P77 million.

Shell, in the meantime, will continue operating its CNG refilling station until PNOC EC completes the new Laguna station.

Putting up the refilling station will be the first project in the government’s planned P400-million capital investment for the construction of CNG facilities in Luzon.

The acquisition of Shell’s lone mother station in Batangas and lone daughter station in Laguna is being used as a platform by the government to aggressively push for the massive use of alternative fuels like CNG for public transport in the Philippines. One of the goals of the DOE is to have as many as 1,000 buses running on CNG over the long term.

The Philippine government has been pushing for the use of alternative fuels, such as natural gas, as this can help address concerns over rising fuel prices, diminishing petroleum supply and several environmental issues.

In September this year, PNOC EC disclosed that it was still waiting for the DOE approval on CNG pricing, which previously stood at P14.25 a liter.

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