MVP raises concerns over Batangas-Manila LNG pipeline

MANILA, Philippines – Manila Electric Company (Meralco) chairman Manuel V. Pangilinan reiterated the need for a government study concerning a planned 105-kilometer gas pipeline that will that run from Batangas to Manila in a bid develop the country’s natural gas industry.

The project, popular known as the Bat-Man 1 natural gas pipeline, had been proposed by previous administrations but failed to materialize due to concerns regarding supply of gas and sufficient demand.

One concern that government should focus on is off-takers or buyers of liquefied natural gas (LNG), Pangilinan said.

“Who will be the consumers? Why will you build it when there is no sure market? It could be the industrial customers and the power plants, but then you have to import the gas eventually,” Pangilinan said, when asked if his group is interested to join the auction should it push through this year.

The need for infrastructure to convert the gas into a liquid state along the pipeline was another issue raised.

LNG is natural gas that has been converted into a liquid state for easier storage and transportation. Upon reaching its destination, LNG is re-gasified so it can be distributed through pipelines as natural gas.

“You have to build a re-gas facility somewhere in Bataan, Batangas, Cavite or wherever. You will import LNG so you have to re-gas it and push it to the pipeline, and then of course who buys the gas?,” Pangilinan said

 All these factors, he said, must be thoroughly planned.

“We really need to plan everything. Why build something in the first place if there is no market? Importation of gas is also another factor. The re-gas facility and the pipeline are also needed,” he pointed out.

These same concerns were earlier raised by Pilipinas Shell Petroleum Corporation country chairman Ed Chua.

“If you have a pipeline, you have a start and end, so where is your starting point? You should have an import facility or if there is additional gas from Malampaya or another Malampaya, you have a source. Now, who is the customer?” Chua commented.

Government concerns

The Department of Energy (DOE) said the Bat-Man pipeline will be bidded out as a Public-Private Partnership (PPP) project.

The project, estimated to cost between $100 million (P4.69 billion) to $150 million (P 7.04 billion), is unlikely to happen this year however.

“The DOE has several questions to the technical advisor of the PPP Center that they have to address. I am not sure if we can still do it this year,” said Melita Obillo, director of the DOE’s Oil Industry Management Bureau.

The project was already approved by the National Economic Development Authority Investment Coordinating Council (NEDA ICC) albeit with concerns.

DOE Officer-in-Charge Zenaida Monsada earlier said the project can be elevated for approval to the Cabinet once the questions raised by NEDA and the Department of Finance have been addressed.

“In principle, this is a government project. We don’t want it to be delayed, but we want to be sure that once it’s tacked by the board, everything will go smoothly,” Monsada said.

PPP Center Executive Cosette Canilao said it was the DOE that pulled the project out from the NEDA board.

The PPP Center earlier commissioned the Rebel Group International BV to conduct the feasibility study for the project.

One of the questions raised was the specific location of the pipeline.

Former Energy Secretary Carlos Jericho Petilla, who also pushed for a revision of the study, noted that the proposed study indicated that the pipeline will constructed from end to end, without customers in between. – Rappler.com 

 $1 = P 46.94