DOE wants BatMan gas pipeline as PPP project

The Department of Energy (DOE) plans to put under the private-public partnership (PPP) scheme the proposed Batangas-Manila (BatMan-1) pipeline project that will deliver natural gas from the Malampaya rig to power stations and the transport sector in Metro Manila. "I don't know if it will be up for bidding, [perhaps] solicited PPP," Energy Secretary Jose Rene Almendras said this weekend. "The problem is, the World Bank (WB) says no private sector [entity] will go into it by [itself] because of the long gestation process. In most countries, LNG (liquefied petroleum gas) terminals always have the government [stepping in]," he added. The energy chief said he had already directed the state-owned Philippine National Oil Co. (PNOC) to take a closer look at BatMan-1 as one alternative source of power. "I'm asking PNOC to really study [BatMan-1], and also we really need to look at LNG. We have 2,700 megawatts (MW) of generation capacity dependent on one gas field. I need a back up plan, which is LNG," he said. Moreover, Almendras said he had asked the PNOC to conduct a thorough review of the gas pipeline project. "I want PNOC to study the energy industry, the PPP that was presented by the WB, I want PNOC to study the possibility of [a pipeline to bring] natural gas to Metro Manila both for generation and transportation. Because we also look at natural gas alternatives for buses," he said. He said it is crucial for the government to get a steady supply of fuel for the power generation and transportation needs of the country. "You need a back up," Almendras stressed. "What if something suddenly happens somewhere?" He underscored the difficulty of having a few hundred facilities operating several thousand equipments that can go wrong anytime. "I have one boiler tube leak and one 600-MW plant [gets bogged] down. That's the kind of odds, so that’s why we need backups. We really need to develop alternatives." PNOC has reportedly been keen on getting someone to guide the company on how to go about the bidding for the100-km BatMan-1. "PNOC will get a consultant, it has to be a foreign consultant, to help PNOC determine the best way to bid out the BatMan-1 project," a source privy to the negotiations said. PNOC had earlier junked the unsolicited bid of listed Abacus Consolidated Resources & Holdings Inc. for a joint venture to develop the pipeline project. The BatMan-1 project, undertaken by PNOC's subsidiary PNOC Exploration Corp., has drawn interest from foreign investors like PTT of Thailand, Japanese power firm Marubeni Corp., and Russian power firm Gazprom. As stated in a standing memorandum of agreement, PNOC owns the BatMan-1 and BatMan-2 gas pipeline projects but assigned the implementation of the projects to PNOC-Exploration. — MRT/VS, GMANews.TV