Eastern Petroleum pours P3 B into LPG business

MANILA, Philippines - Eastern Petroleum Corp. is pouring in P3 billion for its new liquefied petroleum gas (LPG) business, its top official announced yesterday.

In a briefing with reporters, Eastern Petroleum chairman and chief executive Fernando Martinez said they would launch the LPG cylinder as EC Gas.

He said the company will make the initial P3-billion investment for the first year of operation of its LPG business.

Martinez said their LPG container is explosion-proof and made from composite materials up to 10 kilograms lighter compared to the average weight of LPG made from steel.

He said the most important feature of the cylinder, supplied by Norway-based Hexagon Ragasco AS, is its ability to withstand explosion even if set on fire.  Ragasco is a leading producer of composite pressure containers.

The introduction of Eastern Petroleum’s EC Gas comes after a series of high profile accidents involving LPG, which resulted in serious injuries and deaths.

According to April 2013 data from the Bureau of Fire Protection, more than 800 LPG-related fires occurred from 2005 up to the first quarter of the year, making it the third leading cause of fire among households.

“That’s an average of 100 a year,” Martinez pointed out.

He added this makes the use of the 60-year steel container technology an alarming and dangerous practice.

Martinez, who is also president of the Independent Philippine Petroleum Companies Association (IPPCA), said aside from the high incidence of fire, the steel cylinder is inconvenient because of its average weight of 26 to 27 kg.

On the other hand, Martinez said EC Gas’ standard 11-kg container weighs only 5.3 kg as compared to the 15 to 16 kg of existing steel cylinder tanks.

Martinez said Eastern Petroleum hopes to roll out one million EC Gas cylinders a year from the official launch of the product in September.

The initial market areas are Metro Manila and Calabarzon. The rest of the country will be covered by the first quarter of next year through a network of distributors and franchisees, Martinez said.

He said it took the company more than two years of comparative studies of various LPG technologies before finally embarking on the Ragasco composite cylinders, which has been in use in Europe for 20 years.

The technology is also widely used in North and South America and the Middle East.

Martinez said the introduction of the new cylinder is also part of Eastern Petroleum’s advocacy for safety.

“The challenge is how to make it available for every household at the shortest possible time since it involves your own safety,” he stressed.