Shell set to complete CNG refilling stations in May 2007

The Royal Shell Dutch Group, through Pilipinas Shell Petroleum Corp., has set a new target for the completion of mother-daughter compressed natural gas (CNG) refilling stations to May 2007, the country’s top energy official said.

Energy Secretary Raphael P. M. Lotilla said Shell "has not formalized it but the target is May next year, at the latest."

Lotilla met with Shell officials when he accompanied President Arroyo for a nine-day investment mission to Europe. He said there was even an indication from the Dutch oil consortium that the commercial operation of the CNG project could kick off at an earlier date.

"If they would be able to address some of the security concerns as soon as possible, the projected commencement of the project could be earlier than that," he said.

It would be recalled that after raising security concerns, the Shell Group earlier said it may delay the project for some months. This prompted the Department of Energy (DOE) to consider other contractors for the CNG downstream development project.

Shell indicated it could start with the project and finish it in six to 12 months time.

Lotilla said high-level officials from British Gas and the Shell Group are expected to arrive in Manila next month to discuss more investment opportunities in the country.

Another area that the Shell Group is very keen on pursuing, Lotilla said, is Service Contract (SC) 60, operated by the consortium of Shell Philippines Exploration B.V (SPEX), Kuwait Foreign Petroleum Co. (KUFPEC) Philippines Onshore B.V., and South China Resources Inc., to develop the untapped oil prospects in the northeastern part of Palawan. SC 60, converted from the Geophysical Survey and Exploration Contract 99 (GSEC 99), covers a relatively unexplored area of one million.

By November, Lotilla said they expect other European groups to firm up their bilateral talks with the Philippines, particularly in the area of energy and power.

Being a pioneer in the upstream natural gas sector, Shell has been given the sole right to pilot-test the setting up of mother and daughter CNG refilling stations.

At present, the DOE is currently working out a set of guidelines that would carry policy declarations of the government on the "open access" scheme.

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, which is also being run by SPEX.