Gov’t assures public of stable gas supply

The sale of Royal Dutch Shell Plc’s liquefied petroleum gas (LPG) business in the country to a Filipino-Japanese consortium will not affect local supply of cooking gas, according to Energy Secretary Jose Rene D. Almendras.

“No impact on supply as the inventory volumes are [already] in place,” Almendras said, as Pilipinas Shell’s LPG business currently accounts for 20 percent of the country’s LPG market.

Almendras made the assurance Tuesday following the confirmation made by Pilipinas Shell Petroleum Corp. regarding its signing of a share-purchase agreement with a consortium of Isla Petroleum and Gas Corp. of the Delgado group and Itochu Corp. of Japan. The agreement was for the sale of the shares of Shell Gas (LPG) Philippines.

“This agreement represents the outcome of the review for Shell’s LPG businesses in the Philippines and is separate from Shell’s other LPG businesses under review, which will be the subject of a separate announcement,” the company said in a statement.

“The sale of Shell’s share in the Philippines LPG business is consistent with Shell’s strategy to concentrate its global downstream footprint into fewer, larger markets,” it added.

Pilipinas Shell assured its customers that the remaining downstream business of the company in the Philippines would not be affected by the deal, the value of which remained undisclosed as of press time.

However, a Reuters report Tuesday cited the Nikkei business daily as saying that the deal was worth “around 10 billion yen ($131 million).”

The report quoted Itochu as saying that the deal was “in line with its goal to expand its global energy trading business.”

Itochu and Isla Petroleum have reportedly been supplying petroleum products in the Pacific islands of Guam and Saipan through a joint venture and the purchase would tap the growing LPG demand in the Philippines, the report added.

Isla Petroleum sold a portion of its shareholdings to Itochu Petroleum Co. (Singapore) PTE Ltd. last year. It acquired Shell’s retail station assets in the North Pacific Islands, including Guam, Saipan and Palau in 2009.

Last year, Shell had said that it was in discussions with third parties as part of a review of ownership options for most of the company’s LPG businesses worldwide. The review included France, Belgium, the Netherlands, Luxembourg, Denmark, Finland, Sweden, Norway, Hungary, Poland, the United Kingdom, Malaysia, Pakistan, Sri Lanka, the Philippines, Singapore and Argentina.