Gov’t offers incentives for investors in CNG station

The government will continue to entertain investors for the construction of the country’s first compressed natural gas (CNG) mother-daughter station despite the commitment of the Shell group to put up its own facility by June this year.

Department of Energy (DOE) director Mario Marasigan said they have to ensure that the CNG program finally gets going with or without the Shell group.

Shell has been given priority by the government as it is considered a pioneer in natural gas development in the country, having led the discovery and exploration of the Service Contract 38 or the Malampaya deep water gas- to-power project in northwest Palawan.

There was apprehension that Shell, after recently deciding to defer plans to expand its oil refinery in Batangas, may also reconsider its proposed CNG mother-daughter station project.

Marasigan said should Shell opts not to pursue this project, the DOE will have to look for other parties interested in pursuing investments in the CNG industry.

"If Shell fails, we have to invite other partners. We have to proceed with the program even with delays," Marasigan said.

Shell has been delaying for over a year the construction of its CNG mother-station in Batangas due to safety considerations. With the technical concerns already being addressed, Shell officials said it will now be able to start the commercial operations of the CNG stations this year.

According to the DOE official, the promotion and increased utilization of alternative transport fuels such as CNG will help lessen the country’s dependence on imported fuel especially at a time of volatile oil prices.

At present, the transport sector consumes about 56 percent of the country’s total oil requirements.

There are other parties that already signified interest to construct the CNG mother-daughter stations.

Putting up the CNG stations is one of the possible jump-off points for the use of natural gas in the transport sector.

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

At least three foreign firms have also signified interest to take 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 also 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 ventures.