Shell starts construction of CNG refilling station

The Shell group has formally kicked off its downstream natural gas initiatives with the groundbreaking of its mother compressed natural gas (CNG) refilling station in Tabangao, Batangas.

Energy Secretary Vincent S. Perez together with the officials from Shell Philippines Exploration B.V. (Spex), the major operator of the $4.5-billion Malampaya deep water gas to power project or Service Contract 38 in Northwest Palawan, led the groundbreaking ceremony for the construction of the said CNG station over the weekend.

Other members the Malampaya consortium, Chevron Texaco Malampaya LLC and the Philippine National Oil Co.-Exploration Corp. (PNOC-EC), also joined the ceremony.

"With the construction of the mother-daughter refueling station, the operations of our pilot CNG bus program is now on its final take off," Perez said.

Representing the Shell Group are Shell CEO for Asia Pacific Dominique Gardy, Shell country chairman Ed Chua and Malampaya asset manager Keith Perri, Hank Tomlinson, president of Texaco Malampaya LCC and Mr. Rafael del Pilar, vice-president of PNOC-EC join the SC 38 partners.

Incoming Energy Secretary Raphael Perpetuo M. Lotilla, Argentine Ambassador Mario Schuff, British Ambassador Peter Beckingham and Dutch Ambassador Robert Vornis also attended the ceremony.

The construction of the CNG mother station and a daughter or CNG retail station in Biñan, Laguna, which will amount to P350 million, will complete the mother-daughter refueling system to be adopted as an initial fuel transport system until the pipeline infrastructure that will deliver the natural gas from the Batangas onshore plant to Metro Manila has been finished.

Perez said the establishment of the mother-daughter station is the last necessary step to jumpstart the CNG for Public Transport Pilot Project spearheaded by the Department of Energy and the Malampaya SC 38 joint ventures partner.

In the last two years, Perez said, various stakeholders have worked hard to commence the implementation of the seven-year pilot project that will determine the commercial viability and market demand of CNG-fueled public utility buses.

For one, SC 38 partners have agreed to sell Malampaya natural gas considerably lower than the prevailing price of diesel for the next seven years to entice bus operators to use CNG-fueled vehicles. The project is the first non-power utilization of the Malampaya natural gas.

Perez also said a number of government financial institutions led by the Development Bank of the Philippines, Land Bank of the Philippines and PhilExim Bank have opened attractive financing package to help transport groups switch their fleets to natural gas vehicles.

He said HM Transport, Inc. will bring the first original equipment manufacture CNG bus from China by the end of this month.

Thirty-five additional CNG buses will arrive by June this year, in time for the scheduled completion of the mother-daughter station. By end of the year, around 200 CNG buses are expected to be plying the Batangas-Manila and Manila- Batangas routes.