PNOC-EC to lead operation of $100-M gas pipeline project

The PNOC-Exploration Corp. (EC), the oil and gas exploration arm of the Philippine National Oil Co. (PNOC) plans to lead the commercial operations of the $100-million Batangas-Manila (Batman I) gas pipeline.

EC president Rufino Boma-sang said while EC intends to be the lead operator of the pipeline, it can allow private sector groups to own the project’s assets.

"This is the initial structure recommended by our financial advisor last month. Basically, we will remain as the operator of the pipeline and will invite the private sector for the ownership of the assets," Bomasang said.

But Bomasang said they are still reviewing this kind of set-up. "We are studying if this recommendation is viable," he said, noting that they will be able to come up with a concrete structure within the year.

He said they are also in the process of looking at the appropriate financial structure that would maximize the participation of the private sector in the Batman I project.

"ABN-Amro (EC’s financial advisor in the project) is still studying the financial structure," he said. Initially, EC intends to raise about 80 percent of the project cost or $80 million. The remaining $20 million is expected to be shouldered by other partners.

Bomasang said EC has been actively talking with various groups such as First Gas Power Corp., Petronas of Malaysia, Korea Gas Corp. and Tract Tebel for possible partnerships.

The government is also considering putting up another gas pipeline from Bataan to Manila (Batman II), and another stretching from Batangas to Cavite (Batcave).

There are several other foreign groups that have expressed interest to undertake the project with the EC, including Japan Gas Corp., BP Plc, and Korean Electric Power Co.

These firms have also offered to convert the 300-megawatt Sucat I and 600-MW Limay diesel power plants into natural gas facilities.

Other groups interested in the pipeline projects are Mashhor of Brunei, ChevronTexaco and Shell Philippines Exploration BV (Spex).