Chevron eyes other supply deals amid shutdown of FPIC pipeline

MANILA, Philippines - Chevron Philippines Inc. (CPI), one of the oil firms affected by the pipeline shutdown of First Philippine Industrial Corp. (FPIC), is preparing to initiate alternative supply arrangements between its Batangas import terminal and the Pandacan depot.

CPI manager for policy, government and public affairs Mark Quebral said this move came after the Makati City government ordered a stop in the operations of the Batangas-Manila pipeline operated by the FPIC.

“We are putting in place these alternative arrangements to assure our customers in Metro Manila and the general public of a steady and reliable supply of fuel especially during the three-day long Halloween weekend,” Quebral said.

“These are part of our business continuity procedures to address situations where fuel supplies and operations may be impaired due to incidents such as the shutdown of the pipeline.”

Makati Mayor Erwin Binay ordered yesterday FIPC to cease operations after a joint city and University of the Philippines-National Institute of Geological Sciences (UP-NIGS) team positively identified the pipeline as the source of a three-month long fuel leak affecting the Bangkal area of the city.

Meanwhile, CPI is reiterating its offer to assist FPIC in containing the leak and addressing the impact that has affected residents of the West Tower condominium in Bangkal.

 “At the start of the incident last July we signified to FPIC our willingness to help them through the provision of equipment, personnel, and whatever expertise we have in addressing the situation around the West Tower condominium,” Quebral said.

 “This is part of the oil industry’s support mechanisms and protocols to help one another in addressing incidents affecting the safety and reliability of our operations,” he added.

Directly affected by the shutdown are the operations of Pilipinas Shell and Chevron. The pipeline shutdown will affect 50 to 60 percent of Chevron’s supply. Likewise, Pilipinas Shell’s supply will be affected by 60 percent. 

Chevron has presented alternatives to shipping its petroleum products. It has proposed that trucks to Batangas and Poro Point will serve North and South Luzon, as this method will be able to serve 25 to 30 percent of the Pandacan volume. 

Chevron has also proposed the use of barges in the shipping of gasoline, kerosene and diesel to serve 25 to 30 percent of its requirement. 

The oil company will face a different concern in the transport of jet fuel as this will need a dedicated barge.

FPIC’s shutdown, on the other hand, will directly affect Shell’s 715 stations from Regions I-IV, including Metro Manila. Shell has determined that it will use the same methodology as Chevron with the use of trucks and barges in the shipping of its petroleum products.

Total Philippines Inc. will accommodate the increase in demand in their retail stations by filling the void left by the shutdown. Total will add 2,685 liters of unleaded gasoline and 8,200 litres of diesel to service its own client base and their prospective additional customers. 

Other players in the oil industry have stated that they will implement longer hours of operations.

The DOE also said it has already requested assistance from the Department of Transportation and Communication (DOTC) and the Metro Manila Development Authority (MMDA) in lifting the truck ban in Batangas City and Metro Manila while the pipeline is non-operational. 

Energy undersecretary Loreta G. Ayson emphasized that the immediate solution everyone is looking into is determining the source of a leak and stop it with finality. 

She also stated that authority expect the pipeline shutdown to last for at least seven days. 

The DOE, she said, has vowed to closely monitor the situation to ensure that supplies of petroleum products will still be available in Metro Manila and areas directly affected by the closure.