PNOC-EC taking over CNG facilities of Shell in PH

MANILA, Philippines—PNOC Exploration Corp., the upstream oil and coal arm of state-run Philippine National Oil Co., is set to finally take over the compressed natural gas facilities of Shell Companies in the Philippines.

In a briefing last week, PNOC-EC chair Gemiliano Lopez Jr. said the company would sign on Wednesday three memoranda of agreement that will allow it to revive the failed Natural Gas Vehicle Program for Public Transport (NGVPPT) of the previous administration.

“PNOC-EC is ready, willing and dependable to take the lead in the natural vehicle gas program,” Lopez said.

The three agreements to be signed on Wednesday, according to Energy Undersecretary Jose M. Layug Jr., will be for the transfer to PNOC-EC of the lone set of mother and daughter CNG stations in Batangas and Laguna, which are owned by Shell; assignment of gas sales contract with the Malampaya consortium from Shell to PNOC-EC; and for the arrangement with bus operators.

PNOC-EC plans to spend about P400 million to put up an additional CNG refilling station in Batangas and another set of mother and daughter CNG stations by 2012.

Joseph Omar A. Castillo, PNOC-EC vice president for the business operations division, earlier said the daughter (refilling) CNG station in Batangas would be constructed as soon as the agreement was signed. The facility will take six months to build, he added.

PNOC-EC also targets to replace the technology being used by the existing mother and daughter station.

The government acquisition of the CNG facilities was expected to revive the failed seven-year natural gas for transport program of the previous administration and push forward the use of this alternative fuel through a different approach.

The government has long 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 and the looming environmental problems such as climate change.