PNOC-EC to take over 2 CNG stations, build more

The oil and gas arm of the Philippine National Oil Corp. (PNOC) plans to take over Pilipinas Shell Petroleum Corp.'s compressed natural gas (CNG) stations just outside Metro Manila to ensure the smooth distribution of CNG for public transportation. "PNOC Exploration Corp. will take over from Shell the Mamplasan station (Binan, Laguna) and the mother station in Tabangao (Batangas), " Energy Undersecretary Jay Layug said over the weekend. He told reporters that the Energy Department has yet to complete talks with the Shell Group on the takeover and determine whether government will compensate Shell. Shell entered into an agreement with the Department of Energy in 2003 for the CNG for government’s Public Transport Pilot Project. Shell built the mother-daughter stations in 2008, the same year the operations started. CNG for the project was sourced from the Malampaya gas field in Palawan. The pilot phase of the CNG program is now in its third year. "They (Pilipinas Shell) are not earning from it (CNG stations project). We have to check if they have recovered their investments for the project," Layug said. PNOC PNOC-EC documents show that Shell is considering backing out of the second phase of the project, which involves additional CNG mother and daughter stations. Since operations began, technical problems have beset the Shell daughter station in Laguna with government noting that "there is no firm gas supply beyond the pilot phase." Moreover on April 8, bus operators in Laguna, anticipating the high volume of passengers during the Holy Week, asked the Energy Department to ensure that there would be an adequate supply of CNG in the province. More stations in the pipeline Shell’s mother-daughter CNG stations were built using Galileo technology from Argentina. Government is looking at technology from New Zealand. “The option is for us to change the technology. Over the long-term, we will also not rely on natural gas from Malampaya. We will utilize imported liquefied natural gas (to fuel CNG buses)," Layug said. Layug said government also targets to bring the number of CNG buses to 1,000. Shell's mother station is capable of fueling 200 buses only. Out of a total of 61 CNG bus units, only 35 at present are plying their routes due to lack of available CNG supply. The original target was to have 200 CNG buses plying the Batangas-Manila route by 2006 and 2,000 CNG buses by 2007. PNOC-EC chairman and CEO Gemeliano Lopez looks forward to the development of additional CNG stations and the construction of another mother station. The company's board has already approved the project’s budget amounting to P400 million in the next two years. PNOC-EC also plans to build another CNG mother-daughter station complex in Batangas to service buses plying the Batangas-Edsa route. It is expected to start operations by October or November. The existing daughter station owned by Shell, on the other hand, will service the Laguna-Edsa route. PNOC-EC will also build a third daughter station at the Mall of Asia in Pasay City to bring CNG closer to Metro Manila bus operators. The company has requested the Energy Department to assure the allotment of natural gas from the Malampaya project beyond the pilot phase to spur bus operators to shift to CNG. Just last Wednesday, Energy Secretary Jose Rene Almendras said the World Bank and other financial institutions were interested in providing funds for all natural gas facilities in the Philippines. – MRT/VS, GMA News