THE CONSTRUCTION of a pipeline to transport compressed natural gas (CNG) is all it might take for Pilipinas Shell Petroleum Corp. (PSPC) to reconsider maintaining its downstream natural gas business.
Edgar Chua, Shell Group of Companies in the Philippines country chairman, told reporters that they have difficulties operating the CNG station in Tabangao, Batangas and the refilling station in Mamplasan without this pipeline.
“It was difficult to run both mother and daughter stations without a pipeline, which was our experience in the pilot project under the Natural Gas Vehicle Program for Public Transport (NGVPPT),” the Shell official said.
When the infrastructure is there, Chua said, it’s going to be an easier decision for us to come back and build a network of CNG refilling stations. “If that time comes, we can always come back and set up the downstream infrastructure, if we still want to participate,” he added.
Under the NGVPPT, the original tripartite agreement with bus companies, DOE and Shell, calls for the setting up of one mother and daughter station.
“We have met our commitment although we have encountered problems in keeping steady supply because of the infrastructure. The purpose of that pilot [project] is to determine the feasibility of putting up mother and daughter stations without a pipeline,” Chua said.
Energy Undersecretary Jose Layug Jr. earlier said the government will take over the PSPC’s CNG station in Batangas and the refilling station in Laguna to ensure the supply of natural gas for public transport.
The DOE has yet to complete talks with the Shell on the takeover and to determine whether government will compensate Shell for the said CNG infrastructure.
“PNOC-EC will take over from Shell the Mamplasan station (in Biñan, Laguna) and the mother station in Tabangao (Batangas). Shell and DOE entered into an agreement in 2003 for the NGVPPT,” Layug said.
As part of the agreement, Shell put up the mother-daughter stations that became operational in 2008, while CNG was sourced from the Malampaya gas field in Palawan wherein government has a 10 percent stake. The pilot phase of the CNG program is now on its third year.
“I don’t think its CNG stations are income generating for Shell. They are not earning from it. We have to check if they have recovered their investments for the project,” Layug said.
PNOC-EC documents showed that Shell has expressed interest to back out from the second phase of the project, which involves additional CNG mother and daughter stations.
The Shell daughter station in Laguna has been beset by technical problems since it started operations.
Layug said the option is to change the technology. “Over the long-term, we will not rely on natural gas from Malampaya. We will utilize imported liquefied natural gas [to fuel the buses],” he added.
“At present, there are only 35 buses of the 61 running on CNG due to lack of available CNG supply. Shell’s mother station is capable of fueling 200 buses only. And the government also targets to bring the number of CNG buses to 1,000,” Layug said.
