STATE-RUN PHILIPPINE National Oil Co. has thumbed down the unsolicited proposal of a consortium led by investors from Italy and Abu Dhabi for the construction of the $1.2-billion Batangas-Manila (BatMan 1) natural gas pipeline.

Sources privy to the matter said PNOC found the local member of the consortium to be financially and technically incapable of undertaking what could become the largest natural gas development project in the country.

The consortium is composed of Abu Dhabi-based Sultan International Holdings, local firm Abacus Consolidated Resources and Holdings, and Saipem ENI of Italy.

Sources said PNOC had also found out that the involvement of the foreign firms in the project might be limited to the provision of services for the construction activities involved in BatMan 1. They may not necessarily come in as investors.

According to the unsolicited proposal submitted in December 2009, the consortium proposed to put up the 100-kilometer Batman 1 pipeline, a liquefied natural gas terminal, and a 600-megawatt power plant. These facilities would be drawing their natural gas requirement from the Malampaya deep-water gas-to-power project.

PNOC is now preparing the terms of reference for the conduct of a public bidding of the BatMan 1 project.

Expected to be completed in four years, the Batman 1 pipeline will deliver natural gas from Tabangao, Batangas, to the decommissioned 850-MW Sucat bunker fuel-fired power plant. The winning bidder is expected to convert the Sucat plant, owned by National Power Corp, into a natural gas facility.