DoE eyes cheap funds for gas project
The Department of Energy is looking to tap long-term loans from multilateral agencies to help fund the first phase of the $2.1 billion Batangas-Manila natural gas pipeline project and put up the proposed PNOC Pipeline Corp.
According to Energy Secretary Jose Rene D. Almendras, there is a standing offer for partial funding from Japan International Cooperation Agency, the same body that conducted a feasibility study for the Philippine natural gas master plan.
Almendras said that in addition to equity investment, loans will have to be secured because of the need to “overbuild” infrastructure to allow for future expansions.
He said this is why the government does not expect to earn from running the gas pipeline during the first few years of the project.
“You don’t want to put a 12-inch pipeline and then five years later we will all say, we should have built a 24-inch pipeline instead,” Almendras said in an interview with reporters.
The proposed BatMan 1 gas project will be implemented in three phases.
Phase 1 will involve the construction of a $200-million 105-kilometer gas pipeline, which the government will undertake, while the second and third phases will involve the construction of the receiving terminal and a 600-megawatt power plant to serve as anchor load.
The last two phases will be bid out to interested private sector parties and consortia.
The government plans to pursue the pipeline project through the Philippine National Oil Co., which will soon put up a separate subsidiary to be called PNOC Pipeline Corp.
“We are finalizing the incorporation papers…we have set aside funds for the capitalization of PNOC-PC. I don’t know exactly how much, but we are looking at about $100 million to $150 million, or roughly P5 billion. This is what we’re computing right now,” Almendras said.
