Revisiting risk of Pandacan and fpic-Shell pipeline

If there is one word that I can describe Ramon Ang, already considered as one of the country’s most powerful moguls with the continuing expansion of its flagship company, San Miguel Corp., from the food and beverage industry to other industries, it is decisiveness.

The particular case I wish to bring up is Petron’s ongoing relocation of its largest oil depot in the country from the urban center of Pandacan, Manila to various areas in the metropolis. Even if other oil companies that also reside in Pandacan have said that a move would be impossible, Ang had persisted.

After announcing a $500 million plan to relocate its oil storage facilities in Pandacan in August last year, Ang as Petron chairman and CEO just recently announced that the country’s biggest oil company is confident of completing relocation plans before 2015 ends.

Petron had earlier submitted a plea before the Supreme Court to give it five years or until 2016 to complete its moving out of Pandacan. Petron, together with Shell and Caltex, have been asked by the City of Manila to give up its depot in Pandacan in favor of minimizing safety and security risks in a highly populated area.

Dilly-dallying since 2001

The oil companies had been able to use legal maneuverings since November of 2001 to wriggle out of a long-term plan by the local government to convert the area to a mixed commercial-residential land use area.

The oil companies had initially requested for time, and offered a temporary compromise to just scale down operations. Unfortunately, to this date and much to the distress of the residents around the Pandacan depot, the depot operations may not cease.

While the other companies dilly-dallied, Petron had come up with concrete measures to relocate its fuel tanks and operations. Shell continues to be defiant by publicly announcing that it has no plans of leaving Pandacan. Caltex, on the other hand, has tried to keep out of the public eye by not issuing any statement.

‘Less’ risk

Shell and Caltex may argue that with Petron leaving, there is now less risk in the area because of the lower volume of petroleum products being transported to and stored at Pandacan.

Likewise, with the partial closure of the Batangas-Manila pipeline after that fuel leak affecting a residential condominium unit in Makati City, the volume of fuel stored by Shell and Caltex, who both use the pipeline, has decreased.

Kenya pipeline deaths grim reminder

Lest Shell and Caltex wriggle their way out of the safety and security issue by convincing government that their continued stay in Pandacan is less risky, and with this to eventually get the 117-kilometer pipeline operating, a recent incident in Nairobi, Kenya should be cited to refresh our regulators’ minds of the folly that comes with re-opening the 40-year old pipeline.

Close to a hundred people living in a slum area in the African city were charred to death in a fire that sprung from a fuel pipeline leak. The state-owned Kenya Pipeline Company said that an over-pressurized pipeline ripped open, and as gasoline that leaked into a sewer and running river ignited, the slum area where it passed burned.

Risk of Pandacan and old pipeline

Pandacan residents, as well as those communities living alongside and adjacent the long pipeline stretching from Tabangao and Bauan, Batangas to Pandacan, Manila are doubly at risk from possible petroleum product-related accidents.

The fact that a part of the old pipeline had developed pinholes that caused a leak undetected for weeks cast light on the integrity of the whole pipeline. FPIC and co-owner Shell should recognize and accept this.

Perhaps it is time for FPIC and Shell to consider abandoning the idea of having the old pipeline reopened. The best option would be to replace the old metal pipes with new ones that are cast to last for 50 years or more, and are better designed to carry fuel. Or just scrap the old pipeline.

Moving out is better option

It’s high time that Shell and Chevron seriously look to moving out of densely populated Pandacan and relieve the growing anxiety of its residents. The cost of relocating may be sizeable, but maybe the strategic value of Pandacan as storage site is now much lessened considering the area and its current environment.

Apparently the often-used line that closing Pandacan and transferring to other sites will increase the cost of fuel products may not be entirely correct. Ramon Ang in announcing the relocation of Petron’s depot operation s out of Pandacan assured the public that the move would not increase the prices of fuel products.

Perhaps an alliance with Petron could be considered once again; I don’t think that Ramon Ang will be one to hold grudges against Shell after its CEO had reportedly brusquely brushed off an earlier offer to jointly invest in new storage facilities as a prelude to moving out of Pandacan.

DOE role

At some point, Department of Energy (DOE) must step in and play a major role in determining what is the best logistic arrangement for the oil industry post Pandacan. This is critical particularly if Shell and or Chevron continue with their dilly-dallying and remain defiant.

The government must not be remiss is providing safe haven to thousands of people exposed to the risk of Pandacan and an old and leaking pipeline.

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Should you wish to share any insights, write me at Link Edge, 25th Floor, 139 Corporate Center, Valero Street, Salcedo Village, 1227 Makati City. Or e-mail me at [email protected]. For a compilation of previous articles, visit www.BizlinksPhilippines.net.