MANILA, Philippines - Callandra Liquefied Compressed Natural Gas (LCNG) Fuels Corp. is tapping the World Bank and the Development Bank of the Philippines to finance its over $100-million LNG infrastructure project in the country.
Documents obtained by reporters showed that Callandra is seeking financial assistance from International Finance Corp., the private sector lending arm of the World Bank Group.
In a letter to Energy Secretary Angelo Reyes, Callandra president Randall Antonio said the company has also officially communicated with DBP its plan to seek the bank’s assistance to fund the implementation of Phase 1 of its proposed CNG Fueling Infrastructure for the country.
He said they are optimistic that IFC will provide the funding for Phases 2 and 3, including the expansion programs for the importation, processing, distribution and retail of both LNG and CNG.
Antonio also informed the DOE that Callandra will also be joined by Merritt Energy Partners, headed by former Energy Secretary Vincent Perez, and Xinao Gas of China in this endeavor.
According to Antonio, the company has also started efforts for the Banked Gas discussions with the Philippine National Oil Co. (PNOC). Banked gas is the value of inventory held due to ‘take or pay’ contractual arrangements. A ‘take or pay’ contract is an arrangement whereby the purchaser pays for gas at an agreed minimum quantity each year. If at the end of the year, the minimum amount of gas has not been taken, the company has the right in future periods to take the shortfall.
“Callandra hopes to eventually forge a mutually beneficial relationship with the PNOC as we develop the natural gas downstream distribution network for the Philippines,” Antonio said.
The Callandra executive said their company will be introducing a unique hybrid technology which will allow them to use Malampaya natural gas without necessary building expensive gas pipelines.
Based on its plan, Callandra will build building a liquefaction plant that will convert Malampaya gas to LNG. LNG will then be transported over significant distances in country, then re-processed (compressed and vaporized) into CNG at Callandra’s distribution points.
CNG is a by-product of natural gas. It is an environmentally cleaner form of fuel that helps reduce pollution and since it is an indigenous natural resource, it also helps reduce the Philippines’ dependence on imported oil.
Callandra is the only entity that has received a Certificate of Accreditation under Category IV (CNG Refueling and Station Operations) of the government’s Natural Gas Vehicle Program for Public Transport (NGVPPT).
Government admits that the growth of the CNG industry remain largely dependent on natural gas from the Malampaya gas field in Northwest Palawan.
The Malampaya consortium led by Shell Philippines Exploration B.V recently invited bidders for the sale of its excess gas equivalent to about 150 billion cubic feet.
Among the interested bidders were Callandra and state-owned PNOC-Exploration Corp.
The company earlier said it is prepared to invest up to $110 million for six fueling stations and a processing plant for CNG in Batangas.