PNOC eyes Samsung as biofuels partner

PNOC-Alternative Fuels Corp. (PNOC-AFC), a newly formed subsidiary of state-owned Philippine National Oil Co. (PNOC), is eyeing Korea’s Samsung Corp. as strategic partner in the establishment of an integrated jatropha plantation and biofuels refinery plant in the country.

Based on PNOC-AFC’s estimates, a 120,000-hectare jatropha plantation would need funding of about P6 billion and a 200,000-metric ton biofuels refinery would require an investment of P2.23 billion.

Under a recently signed memorandum of understanding, Samsung will collaborate with PNOC-AFC in preparing the jatropha-based biofuel project’s basic plans, including a preliminary feasibility study and sales strategies with the support of a third party international consultant.

PNOC-AFC president and CEO Peter Anthony Abaya said both parties want to fasttrack the project. "We are targeting the final feasibility report this November, and we are expecting favorable results."

Samsung as prospective investor will arrange the required debt financing and execute the engineering, procurement and construction of the biodiesel-producing refinery plant and take care of the export marketing of the product.

Abaya expressed confidence that the project will be a success. "We are upbeat about jatropha and we aim to become a prominent alternative fuels-producing company."

President Arroyo has directed the new PNOC subsidiary to take the lead in biofuels development.

PNOC-AFC intends to establish a number of jatropha-based biofuels refineries with a total capacity of one million metric tons, a 700,000-hectare jatropha plantation for feedstock, a fuel refinery with a capacity of 50,000 barrels per day from low-rank coal, and a biofuel central terminal facility. 

Abaya said jatropha plantations will be established primarily in Mindanao for the feedstock of the refineries. 

Refineries with capacities ranging from 60,000 to 240,000 metric tons per year will be fueled by jatropha plantations with areas from 30,000 to 120,000 hectares, respectively.

According to Abaya, there are ongoing negotiations with other prospective joint venture partners and he expects to sign more MOUs towards the end of the year.