If the Philippines wants its natural gas program for the transport sector to work, the country will have to invest in gas pipelines, Shell country chairman Edgar Chua said on Thursday.
The realization was the result of a seven-year pilot test on the mother-daughter compressed natural gas (CNG) program between the Pilipinas Shell Petroleum Corp. and the Department of Energy (DOE).
"The purpose of that pilot is to determine the feasibility of putting in a mother and daughter station without a pipeline. Our experience showed that it's very difficult. This is the learning of the pilot," he said.
In 2003, Shell and the DOE signed an agreement on the seven-year Natural Gas Vehicle Program for Pubic Transport (NGVPPT) that would eventually benefit over 200 buses. The Shell group also operates the Malampaya gas field in Northwest Palawan.
However, it was only in late 2007 that the project was realized with the CNG refilling station in Mamplasan, Laguna, which serviced 22 buses and sold CNG at P14.75 per liter. Once the station goes into commercial operations, it is expected to sell CNG at P25 per liter.
Supply problems encountered
"Right now, the original memorandum of understanding, which was a tripartite agreement with bus companies, DOE and Shell, was for one mother and daughter station. We have met our commitment, although we have encountered problems in keeping steady supply because of the infrastructure," Chua said.
At the end of the testing period, the company might still opt to join NGVPPT.
"Even with a pipeline and if that time comes, we can always come back and set up the downstream infrastructure, if we want to participate. When the infrastructure is there, then it's an easier decision, we can just say we want to come back and build a network of CNG refilling stations," he said.
Earlier, the DOE had plans of taking over the Mamplasan project from Shell to cushion the impact of higher oil prices on the transport sector and ensure the smooth distribution of natural gas for public transport.
Shell had also expressed plans of backing out of the deal which involved creating additional CNG mother-daughter stations as part of the project’s second phase.
The government has yet to determine the program beyond the pilot phase due to a lack of gas source. The current program uses Galileo technology from Argentina but there are plans to get technology from New Zealand.
“Over the long-term, we will also not rely on natural gas from Malampaya. We will utilize imported liquefied natural gas [to fuel the buses]," said Energy Undersecretary Jay Layug.
Layug said that with the new plans, they are keen on raising the number of CNG buses to 1,000. Only 35 buses are currently running on CNG because of the CNG supply shortage. — BC/VS
