Shell calls for pressure tests on FPIC white oil pipeline

MANILA, Philippines—Pilipinas Shell Petroleum Corp. is hopeful that the Supreme Court will soon allow the conduct of the much-needed pressure tests for the 117-kilometer Batangas-Manila pipeline, after the high court recently allowed the First Philippine Industrial Corp. (FPIC) to operate the black oil pipeline.

“That’s a good sign, first of all for the Supreme Court to recognize that the black oil pipeline is separate from the white oil pipeline. So we’re hoping that as a result of this, the Supreme Court will also act on our request soon to conduct pressure tests on the white oil pipeline,” said Edgar Chua, country chairman of Shell Companies in the Philippines.

At the sidelines of a joint Shell and Mercedes Benz event Tuesday night, Chua explained that the SC decision clarified that the writ of kalikasan (environment) was only applicable to the white oil pipeline, which carried crude and refined petroleum products from its refinery in Tabangao, Batangas, to the Pandacan oil depot in Manila. The black oil pipeline carries the so-called black fuel or the bunker fuel normally used for power plants.

The conduct of pressure tests on the white pipeline would be crucial in ensuring the integrity of the white oil pipeline, where leaks were found in 2010. The results of these tests will largely determine whether the pipeline can still resume operations.

Owned and operated by the Lopez-led First Philippine Industrial Corp., the Batangas-to-Manila pipeline was shut in October 2010 via the writ of kalikasan slapped by the Supreme Court, after it was discovered as the source of the oil that had been leaking into the basement of West Tower Condominium in Makati since July 12.

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 oil fumes.

To show the extent of damage wrought by the leaks, experts said that it might take as long as three to five years to drain most of the fuel that spilled and contaminated the area within and surrounding the West Tower condominium to meet the so-called “target cleanup” standards.

Anthony Cole, regional environmental manager of the CH2MHill Philippines Inc., earlier admitted that the fuel contamination in the area “will never go back to zero” but the company would be able to clean up as much as it could to meet the most stringent global standards on human health and environment.

Meanwhile, Chua admitted that the reopening of the black oil pipeline would help the company reduce the cost of transporting fuel products to Manila.

“Obviously, the pipeline is still the safest, the most competitive way of shipping products to Manila,” he stressed.

Chua, however, declined to say how the resumption of the black oil pipeline operations would impact on the company’s bottom line, noting that it was “too early to tell.” He also pointed out that there were other bigger factors affecting the bottom line such as higher fuel prices, which have dampened demand and sales over the past five months.

Prior to its closure, the pipeline supplied more than 50 percent of the petroleum products for Pandacan, considered as the largest and most important depot in the country. This depot alone affected the fuel supply in 459 stations in Metro Manila and about 1,800 gas stations in Regions 1 to 4.

On a nationwide basis, the Pandacan depot also supplies 70 percent of the shipping industry’s needs; 90 percent of lubricant requirements; 75 percent of all aviation fuel needs; and 25 percent of the demand for chemicals.

As such, the Batangas to Manila pipeline is considered Metro Manila’s energy lifeline, supplying to critical industries like transport, construction, food manufacturing, rice and sugar mills, mining and power generation.