PNOC-EC taps ABN Amro as financial adviser for $100-M gas pipeline proj

The PNOC-Exploration Corp., the publicly-listed oil and gas exploration arm of state-owned Philippine National Oil Co. (PNOC), yesterday named ABN-Amro as its financial advisor for the $100-million Batangas-Manila (Batman I) gas pipeline project.

PNOC-EC signed an agreement with ABN Amro in a simple ceremony yesterday. The agreement provides for the financial advisor to review the viability and source out funds for the project.

The government is rushing the construction of Batman I to justify the conversion of some oil-fired power plants into gas facilities. These converted power plants will serve as an anchor load to enable the gas pipeline operator to have a ready market in Manila.

The supposed converted gas-fired facilities are expected to provide much-needed additional power requirement for Luzon in 2008.

The Power Sector Assets and Liabilities Management Corp. (PSALM) said they are likely to proceed with the sale of some generation assets of the National Power Corp. ahead or if not simultaneous with the privatization of the transmission assets to be able to meet this target. It takes three to five years to construct a power plant.

PNOC-EC, as one of the main proponents of the $4.5-billion Malampaya gas project, is expected to take the lead in the downstream development of the natural gas industry in the country. PNOC-EC owns 10-percent or about $153.5-million worth of equity in the Malampaya project. The other stockholders are Spex and Texaco of US, each with a 45-percent stake.

PNOC-EC was granted recently by the Department of Energy (DOE) a permit to construct and operate a natural gas pipeline from Batangas to Manila (Batman I).

Other power firms that have expressed interest in taking part in the construction and operation of proposed Batman I pipeline are: Japan Gas Corp., Korean Gas Corp., Petroliam Nasional Berhad (Petronas) of Malaysia, British Petroleum Plc., Korean Electric Power Co. (Kepco), First Gas Power Corp., Mashhor of Brunei, Chevron Texaco and Shell Philippines Exploration B.V.

Some of these firms have also signified interest to convert the 300-MW Sucat I and 600-MWLimay diesel-fired power plants into natural gas facilities.

The government is also thinking of constructing two more gas pipelines, one from Bataan to Manila (Batman II or Robin) and another from Batangas to Cavite (Batcave).

Some of these companies have reportedly been exploring the possibility of forging partnerships with EC for the conduct of feasibility studies for the project.