Shell backs pipeline for CNG transport program – Clark Pampanga Philippines

By Donnabelle L. Gatdula

Manila, Philippines – There is a need to put up a gas pipeline to support the government’s natural gas program for the transport sector, a top industry official said.
Shell country chairman Edgar Chua said one of the lessons learned from a seven-year pilot test on the mother-daughter compressed natural gas (CNG) program is that a gas pipeline is crucial for the steady supply of CNG.
“The purpose of that pilot is to determine the feasibility of putting in a mother and daughter station without a pipeline. Our experience has shown that it’s very difficult,” he said.
In late 2007, Shell and the Department of Energy (DOE) started a seven-year pilot test on a CNG refilling station in Mamplasan, Biñan, Laguna, servicing 22 buses and selling CNG at P14.75 per liter. If this will go on commercial operation, CNG could sell at P25 per liter.
Shell, an operator in the Malampaya gas field in Northwest Palawan, has allocated a portion of its outpuy for the CNG pilot test for the transport sector. The test period will run for seven years and will involve 200 CNG buses.
Chua said Shell has been doing its share of the agreement on the Mamplasan project.
“Right now, the original MOU, which was a tripartite agreement with the 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,” he said.
He said after the pilot test is completed, the group may still decide to participate in the Natural GasVehicle Program for Pubic Transport (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 was apparently eyeing to take over from Shell the Mamplasan project in a bid to further cushion the impact of volatile oil prices on the transport sector.
Energy Undersecretary Jay Layug said this move would also ensure the smooth distribution of natural gas for the public transport.
But Layug admitted that they need to discuss this takeover plan with the Shell Group.
“PNOC-Exploration Corp. will take over from Shell the Mamplasan station and the mother station in Tabangao (Batangas),” Layug said.
In 2003, the DOE signed an agreement with Shell for a seven-year pilot CNG project for the transport sector.
Under the agreement, Shell agreed to put up the mother-daughter stations, which became operational in 2008.
It was learned that Shell has expressed interest to “back-out” from the second phase of the project, which involves additional CNG mother and daughter stations.
Due to birth pains, the pilot program for CNG has encountered problems, particularly technical ones.
Moreso, the government is unsure about the future source of the gas for the program. “There is no firm gas supply beyond the pilot phase,” the DOE said.
The mother-daughter CNG stations were built utilizing Galileo technology from Argentina. Government is looking at technology from New Zealand.
“The option is for us to change the technology. 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),” the energy official said.
Based on the plan, Layug said the DOE is targeting to bring the number of CNG buses to 1,000.
At present, only 35 buses are running on CNG due to lack of available CNG supply.

Source: http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=690438

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