PNOC ties up with Samsung for CNG station

The Philippine National Oil Co. (PNOC) will tie-up with Korea’s Samsung Corp. to spearhead the country’s first mother station for compressed natural gas (CNG), a ranking energy official said.

Energy Secretary Raphael P.M. Lotilla said the two parties are currently discussing the details of the joint venture.

He said the government, through the PNOC, decided to take the lead in putting up a CNG mother station after Pilipinas Shell Petroleum Corp. indicated the possibility of a further delay in the construction of its proposed CNG stations in Batangas.

"Since Shell is encountering some technical problems with their mother-and-daughter stations, PNOC is exploring the possibility of putting up a CNG station with Samsung," Lotilla said.

He said as soon as talks are finalized with Samsung, they would be able to complete the construction of a mother station by the third quarter of the year. "We expect it to come on stream within six to nine months."

The energy official, however, challenged Shell group to push through with their CNG project as soon as possible. "I hope that Shell would be able to race with PNOC with regard to putting up their CNG facilities," he said.

Early this month, Shell had asked the government for more time to put up its CNG mother-daughter stations. "They asked for enough time to make their full assessment and to get back to us," Lotilla said.

"On the CNG, they have written us that they brought in experts to assess and that they have finished the assessment of the mother station last March 30," he said.

But Shell said a number of safety issues still need to be addressed before the actual implementation of the CNG station is carried out.

CNG is being proposed to fuel at least 200 buses which will be plying the Manila to Batangas route.

Aside from Shell, three foreign firms have also signified interest in taking part in the development of natural gas as an alternative fuel in the transport sector.

Tata Industries of India has indicated strong interest to supply and/or assemble natural gas-run vehicles. US-based Callandra Energy Research Co. and Chinese firm Synergy Corp., on the other hand, have shown keen interest in putting up their respective mother- and-daughter CNG refilling stations.

Callandra and Synergy intend to set up two mother stations and five daughter stations each. They intend to pour in a minimum of $10 million to $20 million investment in the said ventures.

But being a pioneer in the upstream natural gas sector, only Pilipinas Shell has the right to pilot test the setting up of mother-and-daughter CNG refilling stations.

The Department of Energy (DOE), however, is currently working out a set of guidelines that would carry policy declarations on "open access."

Based on the natural gas development program of the government, the DOE will see to it that around 10 CNG refueling stations will be built in two years’ time, or from 2006 to 2007.

Initially, the government will source its natural gas requirement for the transport sector from the Malampaya project.

The DOE has accredited seven bus companies to initially run about 185 units of CNG buses in the country’s major thoroughfares. These include: HM Transport Inc (80 units); RRCG Transport (20 units); KL Transport Inc (40 units); Pascual Liner (20 units); BBL Transport System Inc (five units); Greenstar Express Inc., and CNG Vehicles Corp. (10 units).