MANILA, Philippines – The spotlight that the Two Serendra explosion has put on Bonifacio Gas Corp. brings into question the handling of liquefied petroleum gas (LPG), supposedly an environmentally friendly energy source.
Bonifacio Gas Corp. is the exclusive provider of centralized piped-in gas in the Bonifacio Global City residential and commercial district where Two Serendra is located. An explosion hit the posh condominium on May 31, killing 3 and hurting 5 people.
On June 7, Interior Secretary Mar Roxas said a week-long investigation revealed that gas leak caused the deadly blast. Energy Secretary Jericho Petilla said they asked Bonifacio Gas to explain what caused the explosion, which ripped apart 10 condominium units and sent a chunk of concrete wall to a nearby street.
Serendra and some of the high-rise buildings and commercial establishments in Global City utilize the piped-in gas system instead of the traditional 11-kilogram LPG cylinder.
Bonifacio Gas is a joint venture between Fort Bonifacio Development Corp. (FBDC), the main developer of the Global City in Taguig. Serendra’s property developer, Ayala Land Inc., has a stake in Bonifacio Gas via FBDC.
FBDC is the controlling owner of Bonifacio Gas with a 56.36% share. FBDC is a consortium of Ayala Land and the Campos group’s Evergreen Holdings Inc. The two local conglomerates acquired their controlling stake in FBDC in 2003.
Pilipinas Shell, a leader in piped-in gas installation in the country, holds the remaining 43.64% share in Bonifacio Gas.
Supply and demand
Bonifacio Gas is an enterprise meant to take advantage of the promises of LPG, an alternative to oil.
Since condominiums and sprouting townships are centers of energy demand, the 3 private business groups came together and incorporated Bonifacio Gas on November 12, 1998.
Pilipinas Shell, the local unit of global petroleum leader Royal Dutch Shell, supplied the gas, while the local conglomerates led by the Ayala and Campos families provided the connection to the end-users.
Bonifacio Global City, the sprawling 240-hectare military base-turned-grand property development area, is one of the venture’s key demand points. Bonifacio Gas wrote on its website that it is meant “to build and operate an underground pipeline network that will provide a centralized gas distribution system within Bonifacio Global City.”
FBDC tapped Pilipinas Shell as the joint venture partner for Bonifacio Gas because of the latter’s experience in supplying piped-in gas.
Pilipinas Shell spokesperson Bobby Kanapi told Rappler they got in the picture due to high demand from residential and commercial developments for the technology.
Safe, clean, cheap
In line with the government’s thrust to encourage investment and use of alternative and indigenous sources of energy, the Board of Investments recognized Bonifacio Gas as a new industry participant for storage, marketing and distribution of LPG in 2000.
Around the time, the popularity of piped-in gas in commercial and residential establishments started increasing. A number of property developers, including Ayala Land, started incorporating the centralized gas system in their projects.
Residential condominium dwellers, in particular, tend to be highly dependent on appliances like stoves, ovens, water heaters, especially air-conditioning, washing machines and clothes dryers. Access to piped-in gas makes condominium life less costly.
Piped-in gas was believed to “eliminate risks,” which include “fires and explosions posed by sub-standard LPG cylinders,” Ayala said in a 2009 Manila Bulletin report.
Bonifacio Gas also offers energy efficient air-conditioning system that can be used for commercial and residential establishments. Endorsed by the Department of Energy, the air-conditioning technology is said to reduce energy costs of users by almost 58%.
According to its website, Bonifacio Gas “uses an extensive 8-kilometer global standards based piped gas facility to deliver LPG” to provide “reliable, convenient, safe, economical and environmentally-friendly” energy solutions.
The company uses a metered gas system with detectors as a safety measure against gas leaks. These detectors are electricity dependent.
When asked about the safety features of its piped-in gas system, Pilipinas Shell, through Kanapi, deflected the spotlight back to the local partners. Kanapi said Shell is only a minority shareholder in Bonifacio Gas.
Shell representatives occupy strategic positions in Bonifacio Gas, according to the company’s Securities and Exchange Commission’s (SEC) General Information Sheet (GIS) in 2013.
The SEC documents identifies Shell country chairman Edgar Chua as the president of Bonifacio Gas. Dennis Palomar, a Shell executive, is the general manager. Bonifacio Gas pays management fees to Shell.
Bonifacio Gas’ SEC documents show the following 2011 financial status:
- Assets – P121,340,828
- Revenue – P125,015,192
- Operational income – P3,786,356
- Net income – P5,272,138
Some of the “related party” financial transactions of Bonifacio Gas include a P93.9 million-worth of LPG acquired from Pilipinas Shell for its piped-in gas system in 2011, as well as a P4.7 million-worth of chilled water sold to FBDC for an airconditioning system.
Bonifacio Gas also supplied and operated the piped-in gas of the various establishments in Eastwood City Walk, a development of Andrew Tan-led Megaworld Corp. in Quezon City until 2010. – with research from Ramon Calzado/Rappler.com