Flying V eyes tie-up with Callandra for CNG refilling project

MANILA, Philippines - Callandra Liquefied CNG Fuels Corp., a joint venture between Filipino and foreign investors, may tie up with oil firm Flying V for a compressed natural gas (CNG) refilling project.

Flying V chairman Ramon Villavicencio said they have already entered into a memorandum of understanding with Callandra to pursue a potential joint venture undertaking in the future.

Villavicencio said Callandra intends to make use of Flying V’s facilities. “We have already signed a memorandum of understanding with Callandra. They got interested in us because of our retail network,” he said.

At present, Flying V has over 170 retail stations and eight oil terminals and storage depots all over the country.

Based on initial discussions, Villavicencio said Callandra plans to put up CNG terminals in different parts of the country, utilizing natural gas from the Malampaya field in offshore Palawan, which is run by a consortium led by Shell Philippines Exploration B.V.

“Callandra has a tie up with Shell. It will get its CNG from Shell. But its problem is how to make this available to the consumers,” he said.

In November 2008, the Malampaya consortium offered 150 billion cubic feet of natural gas to interested parties from the country’s largest natural gas field, which is estimated to contain 3.7 trillion cubic feet of natural reserves.

Callandra was among those that joined the bidding for the additional gas from the Malampaya field. But to date, the consortium has yet to announce the winning bidder for the excess gas capacity.

The Department of Energy (DOE) has been receiving numerous proposals for the construction of the CNG refilling stations in the country. At present, there is only one CNG refilling station in the country, located in Laguna and run by Shell.

The DOE is targeting to push for the accreditation of more bus operators to convert more units into CNG-run buses.

The Energy department is looking at accrediting 185 more CNG buses in 2009 and by 2010, increase this level to 2,000 buses.

The department has already issued four certificates of authority to import more CNG buses to accredited bus operators.