PNOC-EC mulls joint venture for gas pipeline project

MANILA, Philippines - PNOC Exploration Corp. (PNOC-EC), the oil and gas exploration unit of state-run Philippine National Oil Co., is exploring the possibility of forging a joint venture with XinAo Gas of China, Mitsubishi Corp. of Japan and PTT Public Co. Ltd. of Thailand to build the Bataan-Manila gas pipeline (BatMan 2).

In a disclosure to the Philippine Stock Exchange, PNOC-EC said it is holding talks with these firms for the construction of the 150-kilometer gas pipeline.

“The company said it continues to explore possible joint venture partnerships with these entities which have expressed interest in various chains of the project.”

PNOC-EC, which is listed on the Philippine Stock Exchange, has a 10- percent stake in the $4.5-billion Malampaya deepwater gas-to-power project.

The potential partners of PNOC-EC in this venture are also known for their natural gas projects.

XinAo Gas, a unit of the XinAo Group of China, provides natural gas and liquefied natural gas for residential, industrial and commercial customers, and compressed natural gas vehicle refueling stations. It operates its gas distribution business in over 60 cities in China.

Japan’s Mitsubishi Corp. is heavily engaged in the power and energy businesses on top of its automobile manufacturing venture. It has long established its presence in the Philippine business community.

PTT of Thailand, meanwhile, had been very eager to build gas pipeline projects in the Philippines. It is now conducting a feasibility study on the construction of an LNG terminal in Bataan.

“Preliminary survey of proposed sites for the LNG terminal and greenfield power plant and potential gas markets in Bataan, Zambales and Pampanga were also conducted,” PNOC-EC said.

The construction of the gas pipeline will justify the setting up of a natural gas power plant.

“The setting of these vital energy infrastructures will expand the use of natural gas beyond the power sector, making environment friendly, competitively priced and efficient fuel available to the industrial, commercial and transport sectors and eventually to the households,” the company said.

PNOC-EC’s parent PNOC is in the middle of discussions with the consortium led by a unit of Eni SpA for the development of BatMan 1. 

The Italian-led consortium, composed of Abu Dhabi-based Sultan International Holdings, local firm Abacus Consolidated Resources Holdings Inc. and Saipem SpA, earlier bared their plans to build a $1.2-billion natural gas integrated project.

Saipem is the engineering and construction unit of Eni, Italy’s largest industrial company with a market capitalization of at least $138 billion. Abacus is a local firm whose shares are also listed and traded at the Philippine Stock Exchange.