Malampaya group to supply gas for bus program

The consortium operating the Malampaya gas field off Palawan has agreed to supply the government, through PNOC Exploration Corp., additional gas to support the operations of its compressed natural gas (CNG) bus program.

Joseph Omar A. Castillo, PNOC-EC vice president for the business operations division, told reporters that a memorandum of agreement was expected to be signed on November 3 among PNOC-EC, Malampaya consortium (led by its operator Shell Philippines Exploration BV (SPEX) and the Department of Energy, for the supply arrangement.

Castillo disclosed that the volume of gas supply agreed upon was enough to fuel 200 CNG-fed buses until 2018.

This development is expected to help revive the ailing CNG bus sector, whose participants have been suffering losses due to lack of gas supply. This supply problem, along with the defective system at the lone set of mother and daughter CNG stations in Batangas and Laguna, which are owned and operated by Shell Companies in the Philippines, had caused the failure of the previous administration’s Natural Gas Vehicle Program for Public Transport (NGVPPT) program.

PNOC-EC, which is taking over the operations of the CNG stations from Shell Companies in the Philippines, is expected 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.

According to Castillo, the daughter (refilling) CNG station in Batangas will be constructed as soon as the agreement is signed next month. The facility will take six months to build, Castillo added.

Also, by the end of the year, PNOC-EC 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 Philippine government has since been pushing for the use of alternative fuels such as natural gas, as this can help address spiraling fuel prices in the long run, the expected diminishing petroleum supply, and the looming environmental problems such as climate change.