PNOC-EC set to take over Pilipinas Shell's CNG facilities

MANILA, Philippines - Philippine National Oil Co.-Exploration Corp. (PNOC-EC) is set to take over Pilipinas Shell Petroleum Corp.’s compressed natural gas (CNG) facilities in its bid to jumpstart the country’s stalled alternative fuels program.

Energy Undersecretary Jay Layug said PNOC-EC is in the final stages of negotiations with Shell for the turnover of the refilling station and storage facility.

The issues of the payment scheme for the facilities, however, are still unclear.

The CNG facilities, which were put up in 2008, are pilot projects under the government’s Natural Gas Vehicle Program for Public Transport (NGVPPT), which aims to promote the use of the alternative fuel.

Natural gas for the project was sourced from the Shell-operated Malampaya gas field in Palawan wherein government, through PNOC-EC, has a 10-percent stake.

As part of the NGVPPT, bus operators committed to bring in 200 to 2,000 CNG-fed buses upon the guarantee of the government that it will provide for an adequate supply of the alternative fuel.

Only 35 buses, however, are running because Shell’s CNG refilling station had consistently been mired by lack of fuel and unreliable operations.

Thus, government decided to take over the CNG facilities to allow the NGVPPT to take off.

The Department of Energy (DOE) wants to get 1,000 bus units running on CNG in the next three years.

“There is enough supply of CNG, even for transportation,” Layug said.

PNOC-EC is willing to put up additional CNG stations and storage infrastructure in the country once it takes control of Shell’s facilities.

PNOC-EC, a subsidiary of state-owned PNOC, plans to put up these facilities in Batangas and Metro Manila this year. In fact, P400 million have already been allocated until 2012.