Gov’t to offer pipeline deal
February 24, 2011
Business World
2/24/11
THE GOVERNMENT is planning a third-quarter auction for the proposed Batangas to Manila natural gas pipeline (BatMan-1) project, a Cabinet official yesterday said, with the deal likely to be offered under the public-private partnership (PPP) scheme.
Terms of reference are being finalized and project specifications will also be changed to allow for wider use of the fuel, Energy Secretary Jose Rene D. Almendras told reporters.
The pipeline, originally set to run 100 kilometers from Batangas up to Sucat in Parañaque, will now be extended to Quirino Highway in Quezon City and include "distribution pipes," Mr. Almendras said.
An "anchor load" -- the 650-megawatt Malaya thermal power plant which will be converted into a natural gas-fed plant -- will connect to the pipeline and the fuel will also be utilized by the transport sector.
The project will draw its supply from the Malampaya deepwater natural gas project off Palawan, which already provides fuel to three power plants in Batangas.
"The target [end for the pipeline] is Quirino Highway. We want the pipeline not just to end in Sucat but to go all the way down to Quirino so we can do distribution pipes to EDSA, C-5 Road and Quirino... we can spread the gas distribution not just for transport but for domestic use or for industrial," Mr. Almendras said.
The Energy department is also studying whether to divide the project into segments, he added.
Mr. Almendras indicated that the pipeline project could be offered under the PPP scheme being pushed by the Aquino administration.
"The entire gas pipeline program can be privatized in the sense that it will be offered under the PPP approach," he said, adding: "The bidders can cut it up, build the entire pipeline or undertake the project through a consortium or joint ventures."
"There are so many companies interested, there’s a significant volume of interest on every aspect of the pipeline project," Mr. Almendras claimed.
State-owned Philippine National Oil Co. last September rejected an unsolicited proposal from Abacus Consolidated Resources and Holdings, Inc. to build the pipeline for $1.2 billion. The consortium formed by the company was deemed technically and financially incapable of undertaking the project.
Mr. Almendras said the government was not in favor of unsolicited proposals for the project.