PNOC-EC to take over operations of Shell CNG station

MANILA, Philippines - State-owned PNOC-Exploration Corp. (PNOC-EC) will take over the operations of the first mother-and-daughter compressed natural gas (CNG) station from the Shell group, an energy official said.

Energy Undersecretary Jay Layug said they are now finalizing an agreement with Pilipinas Shell Petroleum Corp. (PSPC) for the transfer of the Laguna-based CNG station to PNOC-EC.

“We met with the Malampaya consortium, PSPC, PNOC-EC and the CNG-bus operators, and we’re already finalizing all needed memoranda or agreements to effect the transfer of the CNG mother-and-daughter refilling station to PNOC-EC,” he said.

He said the takeover would also allow PNOC-EC to put up another CNG daughter station in the Philippine Ports Authority’s property in Batangas, aside from the existing one located in Biñan, Laguna.

“We expect to complete that some time in the next six weeks. And then hopefully by October this year, you will see a new daughter station in Batangas running on CNG,” he said.

The energy official said PNOC-EC would be using a different kind of CNG technology.

“By yearend the technology of the mother-and-daughter station will be replaced by PNOC-EC. The problem with the current CNG station now is the defective technology or system. We want to replace the technology used by PSPC,” he said.

He said they would be bidding out soon the contract for the new CNG technology.

“It will depend on the public bidding of PNOC-EC. The Koreans, Chinese and Australians have approached us all wanting to replace the technology we have now. So PNOC-EC has to conduct a public bidding. The existing technology is from an Argentine company – Galileo,” he said.

According to Layug, the takeover by the government of the CNG operation has been welcomed by the bus operators.

“The bus operators were more than happy when they heard that PNOC-EC will take over. We have to take control of the project if only to ensure success,” he said.

However, Layug said the CNG price, under PNOC-EC, would be slightly higher but would still be lower than prevailing diesel prices.

“It will slightly increase. Right now the price of CNG is around P14.52, and now we anticipate when PNOC-EC takes over since it’s a new investment, it might increase a bit by P4 to P6, which is still much cheaper than diesel,” he said.

With the addition of new CNG station, he said they expect more buses to run on CNG.

He said this development would kick off the new CNG industry in the transport sector.

“To us, it does not matter whether pilot or not – it’s still a project. In fact, our objective is to increase the buses. Right now, we only have around 40 buses. We want to increase to 1,000 in the next three years,” he said.

He said the CNG would still be supplied by the Shell Group. “(The gas will) also from the mother station of Shell in Tabangao. The commitment will be 1,000 buses for the remainder of the project. Malampaya is good until 2024,” he said.