PNOC unit seeks P1.25-B budget for jatropha refinery, other projects

PNOC-Alternative Fuels Corp. needs a P1.25-billion budget this year to support its capital expenditure program and operating expenses, official documents showed.

Specifically, PNOC-AFC is proposing a budget of P845 million for its capex while P411.36 million is intended for its operating expenses.

Bulk of the capex spending at P680 million will be invested in the construction of a jatropha refinery while big chunk of operating expenses, on the other hand, would be used for purchased services and utilities.

Even with the proposed budget, the company created last year to replace and absorb the functions of the former PNOC Petrochemical Development Corp. (PPDC) — is still expected to incur a net loss of P193.54 million in 2007.

Based on its proposed work program, PNOC-AFC would start early this year the establishment of jatropha mega-nurseries. A total of 1,000 hectares in various areas in Mindanao has been identified as potential sites for the project.

Another mega-nursery covering an area of 500 hectares will be established at Fort Magsaysay in Nueva Ecija. This project is a joint venture with the Philippine Army.

PNOC-AFC will also embark on various research and development projects intended to assess and identify the best technology for the propagation of jatropha.

In preparation for the establishment of the aggregate 700,000 hectares of commercial plantations for jatropha targeted to commence in 2008, site selection and assessment activities will be conducted this year.

The company will also provide equity for the establishment of a 100,000-metric ton jatropha refinery. This joint venture project is expected to commence on the third quarter of this year.

Since June 2006, the company had conducted initial evaluation and assessment on sites where the refinery facilities would be possibly located. A primary consideration in choosing the appropriate site is the proximity to the plantation to reduce the transport/delivery cost of feedstocks to the refinery.

PNOC-AFC has coordinated with the Philippine Economic Zone Authority in trying to locate the refinery facilities in economic zones considering the availability of infrastructures such as port and jetty facilities as well as access roads.

Based on these criteria, the following areas were evaluated as potential sites for the refinery: Phividec in Misamis Oriental; Nasipit in Agusan del Norte; General Santos in South Cotabato; and PNOC-AFC Industrial Park in Bataan.

A government-owned and controlled corporation, PNOC-AFC is re-mandated through a presidential directive and officially registered with the Securities and Exchange Commission (SEC) on June 13, 2006.

As a wholly-owned subsidiary of state-owned Philippine National Oil Co., PNOC-AFC has a primary mandate to explore, develop and accelerate the utilization and commercialization of existing and emerging alternative sources of energy and technologies and carry on the business of alternative fuels and other related activities.

It is also mandated to engage in and carry the business of petrochemicals in any and/or all its activities.