Natural gas allocation to transport sector proposed

The Department of Energy (DOE) will urge the Malampaya consortium to allocate a portion of the pipeline’s excess 300 megawatt (MW) natural gas output to the transport sector.

This as Energy Secretary Angelo Reyes admitted the government has yet to secure firm commitment from the operators of the $4.5-billion Malampaya deepwater gas-to-power project to set aside gas to further fuel the development of natural gas in the transport industry.

“We will be discussing that with Shell and the rest of the members of the Malampaya consortium,” Reyes said.

The Malampaya consortium is composed of Shell Philippines Exploration B.V. which owns 40 percent of the project. Chevron Texaco holds the other 40 percent while state-owned PNOC-Exploration Corp. owns the remaining 10 percent.

“Ensuring adequate supply of natural gas for the transport sector is part of the medium and long-term plan of the government,” Reyes said.

Out of the 3,000-MW supply from Malampaya, only 2,700 MW are being supplied to three natural gas-run power plants — the 1,200-MW Ilijan; the 1,000-MW Sta. Rita and the 500-MW San Lorenzo.

Korea Electric Power Co. (Kepco), which operates the Batangas-based Ilijan, earlier said they are willing to expand their natural gas power facility once the Malampaya consortium commits on how much gas it would be willing to sell.

This is the same situation with First Gas Corp., the owner of the Sta. Rita and San Lorenzo facilities, which plans to put up the 500-MW San Gabriel gas-fired power plant if it will get enough gas from the Malampaya project.

In the transport sector, Pilipinas Shell, as a pioneer in natural gas development in the country, led the pilot testing of a compressed natural gas (CNG) refilling station in Mamplasan, Laguna. The pilot project will involve 200 buses.

KL CNG Bus Corp., which plans to put up a P200-million daughter refilling station in Baclaran, is urging the government to talk to the Malampaya group to allot some portion of the excess natural gas in the project.

KL CNG president Charlie Lim said allocating one MW a year (equivalent to 1.5 million cubic meters) in the transport sector could fuel or run 25 buses or 125 jeepneys.

Lim said by using CNG in the transport sector, they could easily peg the price of fuel at P20 to P25 per liter, much lower than the prevailing diesel price of P60 per liter.

“This is what the government should do to help alleviate the impact of soaring oil prices. By using CNG, we can lock in the price at P25 per liter. This is also environment friendly,” he said.