DOE vows to complete Batangas-Manila pipeline

The Department of Energy (DOE) has assured local and foreign investors that it will push through with the construction of the 105-kilometer Batangas-Manila natural gas pipeline.

Energy Secretary Jose Rene D. Almendras gave the assurance when he addressed attendees of the presentation made by the Japan International Cooperation Agency (Jica) regarding the feasibility of the BatMan 1 project—the first natural gas pipeline project on the list of priority projects outlined by the DOE.

“The government is willing to do its share to boost the local natural gas (LNG) industry, in whatever model that may be agreed to be the best and most economic,” he said.

Almendras said, however, that a private company has already expressed interest to invest in the construction of the pipeline.

Energy Undersecretary Jose M. Layug Jr. separately said that the government can invest in the natural gas pipeline itself, which is estimated to cost $150 million.

According to Layug, the DOE will be able to bid out the BatMan 1 project by the first quarter of 2013 as it needed the whole of next year to review regulatory policies and conduct consultations with the other government agencies.

Layug said that the Jica feasibility study confirmed the viability of the BatMan pipeline, given an estimated demand of 600 megawatts from industrial customers. The gas supply will come from the Malampaya gas field off Palawan.

Layug however noted that this preliminary report involved the feasibility only of the 100-km pipeline. Jica has yet to present its findings regarding the needed LNG receiving terminal, a power plant that would provide the so-called anchor load for the pipeline and other related infrastructure. The complete report is expected first quarter of next year.

Jica further suggested to the government three models which it can use to move forward the capital intensive gas project. These are full private undertaking, purely public undertaking or under the public-private partnership (PPP) program.

The complete Jica study is expected to reevaluate opportunities in the

natural gas industry and identify which infrastructure will be deemed as priority projects, and what kind of investments will be needed. It will also evaluate the viability of importing natural gas and the potential sources. It will likewise contain a validation of the supply and demand statistics, as this would spell out the viability of the natural gas program.

Almendras has since stressed the need to pursue alternative fuels such as natural gas given the global oil price volatility, to which the Philippines is highly vulnerable as it sources most of its fuel requirements abroad.

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