Government readies plan for natural gas industry

The government is preparing a development plan for a downstream natural gas industry that will involve the construction of a 100-kilometer gas pipeline from Batangas to Manila, Energy Secretary Vincent Perez said yesterday.

Perez, who accompanied President Arroyo in her State Visit to Malaysia recently, said the development plan would serve as a parallel effort to the Malampaya project of Shell Philippines Exploration (Spex), Texaco of US and state-owned Philippine National Oil Co-Exploration Corp. (PNOC-EC).

In a related development, Perez said the Malaysian government has agreed to pursue talks with the Philippine government on the supply and transport of natural gas via a proposed Philippines-Sabah sub-sea pipeline.

The Philippine government through PNOC and the Malaysian government-owned Petroliam Nasional Berhad (Petronas) are now studying the establishment of a sub-sea pipeline that would transport natural gas from Sabah to the Philippines with possible landings on either Batangas or Bataan.

Perez said the natural gas coming from Sabah could help supplement the supply of Malampaya gas to Luzon by 2006.

"Natural gas could likewise fuel the growing power demand of the economic zones of the Manila-Calabarzon growth corridor along the proposed pipeline route," Perez said.

The energy chief said "we expect that, once the infrastructure is in place, market usage of natural gas will spill over the commercial and household users, and eventually into the transport sector."

Aside from the 100-km pipeline, he said the Department of Energy (DOE)’s development plan for the natural gas industry include the conversion of oil and coal-fired power plants such as Sucat, Malaya, Tegan or Calaca to natural gas, and support the petrochemical complex in Limay, Bataan.

The energy secretary said bringing natural gas from Sabah to the Philippines would mutually benefit both countries, as it would provide a stimulus to the Philippines to develop its natural gas industry beyond the power sector, while Malaysia can market its surplus gas reserves in Sabah that can be transported competitively by pipeline to the Philippines.Last month, the ASEAN Ministers of Energy Meeting underscored the need for cooperation among its member countries to establish an inter-connecting arrangements for natural gas within ASEAN through the TAGP.

Perez noted that the Sabah-Philippines gas pipeline is one key interconnection under the TAGP.

He said that with the continuing volatility of oil prices in the world market, natural gas has become the alternative fuel in the Southeast Asian region being environment-friendly and clean-burning fossil fuel due to its low levels of sulfure oxide and nitrogen oxide emissions.