PNOC to lead gas pipeline project

State-owned Philippine National Oil Co. (PNOC) is being considered to spearhead the $2.1-billion Batangas-Manila (BatMan 1) natural gas pipeline project in a bid to finally jumpstart and boost the country’s natural gas industry.

Energy Undersecretary Jose M. Layug Jr. said PNOC was planning to put up a new subsidiary, PNOC Pipeline Corp. (PNOC-PC), to undertake one of the three components of the BatMan 1 project, specifically the construction of the 105-kilometer pipeline that will run from Batangas to Manila costing as much as $200 million.

“We have looked at models worldwide and we can see that most of the gas pipeline infrastructure are owned by governments, primarily to ensure open access. Because if it’s owned by a private party, obviously, [the firm] will monopolize,” Layug explained.

“If it’s owned by the government, you have considerations other than profit, which is one, to ensure a lower cost of electricity and a fair and open access of gas to all available interested parties. So initially, we would have the government owning and operating [the pipeline],” the energy official said.

According to Layug, the government was planning to proceed with the whole BatMan 1 project in phases as it would not only involve the construction of a gas pipeline, but also of a receiving terminal and an initial 600-megawatt power plant to serve as an anchor load for the facility.

Phase 1 will involve the pipeline, which the government will undertake, while the second and third phases will involve the construction of the receiving terminal and power plant, which will be bid out.

“Right now, the reason why [the government is] building the pipeline is because initially, we would get the supply from the remaining gas from the Malampaya gas project off Palawan, which hopefully will be more economical especially for the industrial market,” Layug said.