PNOC keen on natural gas pipeline project

The Philippine National Oil Co. (PNOC) is interested in joining the plan of Shell Philippines Exploration BV (Spex) and First Philippine Construction Corp. (FPCC) to put up a natural gas onshore pipeline from Batangas to Manila.

In a press briefing, PNOC president and chief executive officer Thelmo Y. Cunanan said the government-run corporation is prepared to infuse an undisclosed amount into the project as long as it would be given a stake.

"We want to make more investments. If the pipeline project is separate from the gas project, then PNOC is prepared make more investments," Cunanan said.

PNOC has a 10-percent stake worth $200 million in the Malampaya natural gas project. Another 45 percent is held by Spex while Texaco of the US holds the other 45 percent.

Cunanan said that if the pipeline is considered part of the Malampaya project, then PNOC is limited to the 10 percent equity-sharing scheme.

Industry sources said the Lopez-led First Philippine Holdings Inc. through its subsidiary First Philippine Construction Corp. is interested in the pipeline project since two of its power plants would be utilizing gas from Malampaya and feeding electricity to the Manila Electric Co. (Meralco).

The planned pipeline is to carry natural gas from Malampaya to a gas-fired power plant within Metro Manila. In the long-term, the natural gas pipeline would be extended to residential and commercial customers.

"From Batangas, we are talking about a land-based gas pipeline to Metro Manila. It is now in the drawing board. We want to be part of that. Many had indicated interest," the PNOC chief executive said.

The proposed gas-fired power plant will most likely be in Sucat which could either be the retired and rehabilitated for gas-fired turbine, or an entirely new power plant could be the recipient of gas from Malampaya.

Spex is talking with Intergen for a feasibility study to establish a 600-megawatt gas-fired power plant in Sucat, where an old National Power Corp. (Napocor) oil-fired plant is scheduled for decommissioning. Intergen is a subsidiary of Royal Dutch Shell Group.

Three power plants located in Batangas with an aggregate capacity of 2,700-megawatts (MW), will use the Malampaya gas. These are the 1,000-MW Sta. Rita power plant, the 500-MW San Lorenzo plant and 1,200-MW Ilijan plant. Other interested generators are Magellan Utilities Development Corp. and the San Pascual Cogeneration Co.

The Sta. Rita and the San Lorenzo power plants are owned and operated by the Lopez subsidiaries.