Shell’s mother-daughter CNG station to push through this year

The proposed mother-daughter compressed natural gas (CNG) station project of the Shell Group will push through within the year, an energy official said.

"Shell has indicated that they could be operational in six to 12 months, as they have already addressed all issues, " Department of Energy (DOE) director Mario Marasigan said.

But Marasigan admitted that the Shell Group is still firm on addressing the issues of security before it could proceed with the project.

"It’s the mother station that has safety issues that would be difficult to disregard. Safety is related to the provision of the technology, and there were components that had to be modified to address the issues on safety," he said.

At the same time, the DOE, in view of the unforeseen delay in the construction of CNG refilling stations, is urging the Shell Group to help shoulder the interest expenses incurred by bus operators who imported CNG-run buses.

"We are working out with the partners for the (CNG) program led by the DOE for policy, and Shell to provide assistance on how to cope with the cost of money. We intend to provide them with the cost of money until they are running. They requested for such assistance from the DOE," Marasigan said

The DOE official noted that bus operators borrowed around P2.5 million to P3 million from the bank which they have to pay interest.

Marasigan said the DOE bewails the fact that CNG, which costs less than half the price of diesel, could not be utilized at a time of high oil prices.

"In view of high oil prices, we regret the fact that we could not make use of the CNG-buses. Otherwise, the price difference between CNG (P14.52 per liter) from diesel (P36 per liter) could have been seen," he said.

According to Marasigan, CNG supply from PNOC’s San Antonio gas plant in Isabela is very limited and expensive because of the long hauling. PNOC’s CNG supply would run at around P65 to P70 per liter.

"We cannot use it for commercial operation. It (PNOC plant) does not have sufficient reserve to supply the 22 CNG buses," he said.

He said there are currently 22 CNG buses and 185 more buses committed by seven bus operators. DOE is targeting the use of 200 buses.

"There have been several bus operators that applied for accreditation, but we have to put on hold their applications. Actually, we have already exceeded the initially target of 200 buses for the pilot program. We cannot give more than 200 buses, since the program only targets 200 buses," Marasigan said.

Despite the delays, DOE is targeting a minimum of 2,000 buses to a maximum of 3,000 buses running on CNG in the next 10 years.