DOE wants government agreement with Malampaya group extended

by Lenie Lectura – January 26, 2016

from Business Mirror

THE Department of Energy (DOE) wants the gas sale and purchase agreement (GSPA) of the government with the Malampaya consortium extended so it could continue with its Natural Gas Vehicle Program for Public Transport (NGVPPT).

“We are in the process of extending the GSPA. The program is until 2018 so we would like SPEX [Shell Philippines Exploration BV] to agree to extend it for another five years until 2023,” Energy Undersecretary Donato Marcos said.

SPEX is part of the consortium. Other members include Chevron Llc. and Philippine National Oil Co. (PNOC) Exploration Corp. (EC).

In 2003 SPEX and the DOE entered into an agreement to implement the program in which Shell would supply natural gas for the pilot phase, involving the deployment of 200 compressed natural gas (CNG) public-utility buses. Shell agreed to put up the mother-daughter CNG stations under its agreement with the government. The stations became operational in 2008, but have since been beset by technical problems.

Still, the government is pushing for the use of alternative fuels, like natural gas. The NGVPPT pilot program, however, will lapse in 2018.

“We are hoping we can come into an agreement soon,” Marcos said.

Currently, there are two existing CNG stations in the country, operated by Pilipinas Shell Petroleum Corp. The mother station is located in Tabangao, Batangas, while a daughter station is situated in Mamplasan, Laguna.

There are over 60 CNG buses in the country.

The NGVPPT was formally created with the signing and implementation of Executive Order 290. Based on earlier plans, the government wanted 200 CNG buses plying the Batangas-Manila route. It then wanted to further expand this to 2,000, supported by 10 CNG refueling stations.

The Malampaya gas field in northwest Palawan provides the CNG supply for the CNG transport program.