Pilipinas Shell to defer construction of CNG stations

Pilipinas Shell Petroleum Corp. has asked the government for more time before it can build its compressed natural gas (CNG) mother stations.

"They (Shell) asked for enough time to make their full assessment and to get back to us," Energy Secretary Raphael P.M. Lotilla said.

Lotilla said Shell has informed the Department of Energy (DOE) of the downstream developments in the natural gas sector particularly on CNG.

"On CNG, they (Shell) have written to us that they brought in experts to assess and that they have finished the assessment of the mother station last March 30," he said.

But the oil firm sees a number of safety issues that need to be addressed before the actual implementation of the CNG station is carried out.

Aside from Shell, three foreign firms have also signified interest to take part in the development of natural gas as an alternative fuel in the transport sector.

DOE director for energy utilization management bureau (EUMB) Mario Marasigan said Tata Industries of India has indicated strong interest to supply and/or assemble natural gas-run vehicles.

Marasigan said the DOE would facilitate meetings with Tata Industries and local bus operators for a possible joint undertaking in pushing for the natural gas vehicle program for public transport. (NGVPPT).

The DOE official said US-based Callandra Energy Research Co. and Chinese firm Synergy Corp., on the other hand, have shown keen interest in putting up mother and daughter compressed natural gas (CNG) refilling stations.

Callandra and Synergy, Marasigan said, intend to set up two mother stations and five daughter stations, each. They intend to pour in a minimum of $10 million to $20 million investment in the said ventures.

According to the DOE official, they are currently evaluating the business plans of these groups.

At present, only Pilipinas Shell has the right to pilot test the setting up of mother and daughter CNG refilling stations.

But Marasigan said they are currently working out a set of guidelines that would carry policy declarations of the government on the "open access."

Based on the program, the government plans to construct 10 CNG refueling stations by two years time or from 2006 to 2007.

Under the NGVPPT, the Shell group, which is the major operator of the $4.5 billion Malampaya deep water gas-to-power project, will put up a CNG mother station: Malampaya On Shore Gas Plant (MOGP) in Tabangao, Batangas.