An initial $2.5 billion in fresh investments will be needed over the next two years once the government starts to implement the master plan for the proposed natural gas pipelines.
Energy Secretary Jose Rene D. Almendras explained that the master plan, which is expected to be completed by the World Bank and the Japan International Cooperation Agency by September, was crucial in helping jumpstart the Philippine natural gas industry.
The Philippine government has been trying to boost this industry as it wanted to tap natural gas to serve as an alternative source for additional generation capacity and to provide cleaner fuel for public utility vehicles.
To prepare for these potential gas pipeline projects, Almendras said the Department of Energy (DoE) was aggressively pursuing technical assistance to review, expand and improve existing regulations that could help facilitate the entry of additional investments in the Philippine gas pipeline systems.
The DoE is likewise pushing for the passage of the Oil and Gas Pipeline Regulation Act, Almendras said.
“We recognize the need for a separate law regulating oil and gas pipelines since different safety standards are needed, given that it also involves different technologies. We are prioritizing the establishment of gas pipelines from Batangas to Metro Manila,” Almendras said.
Under the proposed legislation, the DoE targets to create a National Pipelines Board, which will be equipped with the necessary expertise to regulate and manage pipelines.
The board will be an inter-agency body composed of the DoE and the Departments of Environment and Natural Resources, Transportation and Communications, Public Works and Highways, Health, and Interior and Local Government, he explained.
Almendras noted that the board would have “the power to impose standards and likewise penalize non-compliance. Adjunct to this, the National Pipelines Board will also provide for contingencies relating to security and risk scenarios with an inter-agency drafted framework aimed at reducing the same.”
The energy chief admitted that the proposed legislation for oil and gas pipelines was an “afterthought … something that we learned because of the experience.”
Almendras was referring to an incident involving the 117-kilometer pipeline owned by First Philippine Industrial Corp. The holes in the pipeline caused major fuel leaks in the basement of the West Tower Condominium in Makati City since July last year.
The leak forced the closure of the condominium and the declaration of Barangay (village) Bangkal and nearby areas as a “danger zone” due to the high possibility of an explosion or fire occurring because of the presence of oil fumes.