Synergy of China to invest $200M on CNG facilities in Metro Manila

Chinese firm Synergy International Resources Group Co. Ltd. will invest around $200 million to put up compressed natural gas (CNG) facilities in Metro Manila.

Synergy has signed a memorandum of understanding (MOU) with the Department of Energy (DOE) for mutual cooperation in the development of CNG infrastructure, particularly in the country’s transport sector.

Based on the MOU, Synergy has committed to invest $200 million for the establishment of a CNG refueling system which includes mother-daughter refilling stations, mobile refueling facility and other facilities deemed necessary.

The feasibility study for the establishment of a CNG refueling system is expected to commence not later than March 1, 2006.

Synergy likewise committed to provide technical and operational expertise to the DOE and other related agencies to support the transition of the transport sector to a CNG fuel base. This includes refueling facilities and other related facilities and equipment to convert land and marine transportation from gasoline or diesel to CNG.

Synergy, which has a representative office here in the Philippines, has over 25 years experience in the design, building, deployment and operation of CNG and liquefied natural gas (LNG) equipment technology and methodologies in China.

For its part, the DOE will provide assistance in the preparation of relevant study on the viability of Synergy’s investment in the Natural Gas Vehicle Program for Public Transport (NGVPPT).

The DOE will likewise evaluate Synergy’s application for accreditation as a CNG refueling station operator and manufacturer/assembler of NGVs.

DOE director Mario Marasigan acknowledged Synergy’s strong interest in participating in the NGVPPT, citing that "with this MOU, we hope to enhance the implementation of our NGVPPT through greater public access in the natural gas transport system."

Marasigan said the promotion and increased utilization of alternative transport fuels such as natural gas will consequently lessen the country’s dependence on imported fuel, especially at a time of surging oil prices. The transport sector consumes about 53 percent of the total imported oil requirements.

In October 2002, the government launched the NGVPPT, which lays down the government policies in the downstream natural gas market to encourage active private sector participation and create a healthy competitive environment for all players.

Specifically, the NGVPPT program gives a package of incentives to participants which includes income tax holiday for pioneering projects qualifying under the Board of Investments’ Investment Priorities Plan; zero rate duty on imported NGV industry related equipment, facilities, parts and components; preferential and exclusive franchises for NGVs on newly opened routes; accelerated issuance of environment compliance certificate for NGV facilities and refueling stations; affordable and commercially tenable financial packages from government financial institutions, among others.

The DOE likewise issued a circular last July providing open access to the natural gas sourced or produced from future or existing petroleum service contracts such as the Malampaya and the San Antonio, Isabela gas fields.

By next year, upon commissioning of the anticipated mother-daughter CNG refueling station by Shell Philippines, at least 200 buses fueled by natural gas are expected to ply the Manila-Batangas and Manila-Laguna route.