European investors eye $200-M jv with PNOC for pipeline project

By Donnabelle L. Gatdula
The Philippine Star 04/24/2007

The Philippine National Oil Co. (PNOC) has received a proposal from a European group for a joint venture on the construction of a $200-million petroleum pipeline from Petron Corp.’s refinery in Limay, Bataan to a receiving terminal in Pulilan, Bulacan.

A ranking PNOC official, speaking on condition of anonymity, said establishing the 45-kilometer pipeline would finally resolve the Pandacan oil depot issue. PNOC owns 40 percent of Petron, one of the locators in the Pandacan oil facility.

The European group, the official said, has acquired a 64-hectare property in Pulilan near the North Luzon Expressway which can be a strategic alternative relocation area for the Pandacan oil depot.

According to the official, the group, which already has an existing project at the Manila-Cavite Coastal Road, has already set up the Bulacan property to house an oil warehouse.

"Based on their proposal, they have already put a buffer zone in their property," the official said.

Bulacan would still be an ideal location for an oil warehouse as it is still near the Metro Manila area, which presently consumes 60 percent of Pandacan’s supply.

"Though the proposed facility will be directly beneficial for Petron as it can directly pump its products from Limay to Pulilan, other locators in Pandacan like Shell and Caltex could also use the facility if they like," the official said.

The official also pointed out that the project would be financed solely by the European group. "It will be at no cost for PNOC," he said.

At present, only PNOC and the Lopez-controlled First Gen Corp. have the Congressional franchise to put up pipeline facilities.

"The foreign group is making an offer to PNOC to undertake the project at no cost. They will give free equity in exchange for PNOC’s franchise," he said.

Under the proposed project, the 45-km oil pipeline would traverse through Manila de Bay to Bulacan.

If all necessary documentation and permits are secured, the PNOC official said they expect the project to be completed within 18 months. The Supreme Court is currently hearing the case on the relocation of the Pandacan oil terminal.

The Pandacan terminal is Metro Manila’s energy lifeline supplying some 50 percent of the country’s total demand including 1,800 retail stations in Metro Manila and outlying provinces.

The oil warehouse also serves about 70 percent of the domestic shipping industry’s fuel needs.

About 90 percent of lubricants and 75 percent of aviation fuel are also being primarily sourced from the Pandacan oil terminal.

 

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