PNOC to acquire Shell’s CNG stations in Batangas, Laguna

MANILA, Philippines—The PNOC Exploration Corp. (PNOC-EC), the coal and upstream oil arm of the state-run Philippine National Oil Co., expects to complete by the end of July the acquisition of Pilipinas Shell’s compressed natural gas (CNG) stations in Tabangao, Batangas and Mamplasan, Laguna.

The government acquisition of these facilities was targeted to revive the failed seven-year program to produce natural gas for public transportation started by the previous administration and push forward the use of this alternative fuel, but through a different approach.

“(The government has) to take control of the project if only to ensure success,” noted Energy Undersecretary Jose M. Layug Jr.

Layug said the concerned stakeholders have been working to finalize all the necessary memoranda of agreement to effect the transfer of the stations to the government. Involved in the transactions are the consortium operating the $4.5-billion Malampaya gas-to-power project off Palawan, PNOC-EC, CNG bus operators, the Department of Energy and Pilipinas Shell, which owns and operates the existing CNG stations.

“So we expect to complete that sometime in the next six weeks. And then hopefully, by October this year, you will see a new daughter (refilling) station in Batangas running on CNG,” Layug disclosed.

PNOC-EC expects to spend some P400 million to put up the additional CNG refilling station in Batangas and another set of mother and daughter CNG stations by 2012. The refilling station to be constructed next year will likely be put up in Pasay City, within the Mall of Asia area, according to preliminary plans.

Also, by the yearend, PNOC-EC would replace the technology being used for the existing mother and daughter stations, said Layug, noting further that the failure of the previous Natural Gas Vehicle Program for Public Transport (NGVPPT) program stemmed from a defective system.

“We want to replace the technology used by Pilipinas Shell… (As for the technology we will use), it will depend on the public bidding to be conducted by PNOC-EC. The Koreans, Chinese and Australians have approached us, all wanting to replace the technology we have now. The existing technology is from an Argentine company,” Layug explained.

Bus operators, however, will no longer enjoy a subsidized CNG price, which was then pegged at only P14.52 a liter under the former NGVPPT.

“(The price) will slightly increase. Right now the (pilot) price of CNG is around P14.52 a liter and we anticipate that when PNOC-EC takes over, since it’s a new investment, (CNG price) might increase a bit by P4 to P6 a liter, but which is still much cheaper than diesel,” Layug said.

Over the next three years, the DoE expects the number of buses running on CNG to increase to as many as 1,000 buses from the current 40. Similar to the previous NGVPPT, the CNG will still be taken from the Malampaya.

The DoE has been pushing for the use of alternative fuels such as natural gas, as this can help address spiraling fuel prices in the long run, expected diminishing petroleum supply, as well as the looming environmental problems such as climate change.