US group eyes $210-M investment in CNG stations

Callandra LCNG Fuels Corp., a subsidiary of US-based Callandra group, plans to invest up to $210 million to put up mother-daughter compressed natural gas (CNG) stations in the Philippines, a top company official said.

Randall Antonio, CLCNG president and CEO, told reporters their investment, however, will hinge on the availability of gas supply from the Malampaya gas project in Palawan.

“We plan to put up our daughter stations by 2008. We’re anticipating investing anywhere between $77 million to $210 million to finance the building of fueling stations in Manila and a processing plant. These are all dependent on the decision of Shell for the gas supply,” Antonio said.

He said they could consider importing their natural gas requirements should they experience supply problems with the Malampaya group.

“We’re looking at various gas suppliers, ideally from Malampaya, as well importing natural gas from other countries like Indonesia, Malaysia, Iraq and Qatar,” he said.

He said their plan to invest in the country’s CNG industry will also depend on the Department of Energy (DOE).

“The DOE has given us a commitment, endorsement and is helping us setting the figures to get our accreditation since this will be the very first time our company will establish presence in the Philippines,” he said.

Antonio said the company has strong financial backing from its US and European investors.

“Our strategic partners are all well-experienced in the CNG industry in US and Europe,” he said.

He said one of their partners, CNG Associates of Southern California, were responsible for the CNG terminal and fueling stations in Los Angeles.

CDS of Canada, a CNG engineering firm, and Galileo of Argentina are also part of the Callandra team, he added.

But still, Antonio stressed they are “more of a Filipino company,” with everything to be funded by investors from abroad

We’re hoping, if everything goes well, to have the groundbreaking by early next year or first quarter of 2008.”

Initially, the Callandra group plans to put up a site that would be able to cater to 2,500 buses and expand this to up to 5,000 within seven to 10 years.

 “We’re different from the pilot project, so our price may not be comparable with the pilot operator. Ours will be commercial, but rest assured it will be a lot cheaper than by 25- to 30-percent less than diesel pump price,” he said.

The Shell group, being part of the pioneers of natural gas development in the Philippines, has been given the priority to set up the CNG mother-daughter station.

Last week, Shell inaugurated its daughter station in Biñan, Laguna as part of the pilot CNG project. The facility will fuel up to 200 buses plying the Manila-Batangas routes. The CNG will be sold at P14.52 per liter.

Also backed by Baker-McKenzie, PricewaterhouseCoopers, HSBC, AIG and companies mostly from US and Europe like Clean Energy Fuels, Callandra is a leading participant in the Philippine Natural Gas Program for Public Transport or NGVPPT.

“Our mission is to create a cleaner in-country environment, while promoting the use of environmentally-friendly and economically cheaper alternative fuel for the challenging and critical Philippine public transportation sector,” Antonio said.