Philippines President Asks Energy Boss to Get Investors for Pipeline Project

Text of report in English by Philippine newspaper Philippine Daily Inquirer website on 25 March

BAGUIO CITY -President Macapagal-Arroyo has ordered Energy Secretary Angelo Reyes to “actively secure” new investors for the country’s deepwater gas field to bankroll a long delayed gas-piping project that will power up ordinary houses and fuel the country’s mass transport system.

With world oil prices soaring, the government wants to start maximizing the natural gas reserves, Ms Arroyo said here on Easter Sunday.

“We already imported 200 buses (fuelled by alternative fuels like coco-methyl ester),” she said.

The gas field is 2,788 feet deep in the waters of Palawan and is being jointly mined by the Philippines, Shell Philippines Exploration (SPEX), and Texaco (owner of Caltex Philippines) through the $4.5-billion Malampaya deep water gas-to-power project.

The natural gas is pumped out to a processing plant and is transported by tankers to Batangas to fuel the National Power Corp.’s Ilijan plant and First Gas Philippines’ power plants.

But the government owns only 10 per cent of the Malampaya project, and SPEX retains proprietary control of the operations. Texaco acquired the other 45 per cent share of the project in 1999.

Ms Arroyo said part of the SPEX forecast was to employ the gas for household use, but the government had no control over the firm’s time frame.

She said SPEX might have made a commitment to proceed with a pipeline project but she detected signs that the firm no longer requires the pipeline to fulfil its profit targets.

“Now I have instructed Angie Reyes that he must actively look for investments. When he became secretary of energy I gave him two mandates. One is to continue privatization. One is to bring down the cost of electricity,” Ms Arroyo said.

Citing the energy plan implemented by then Energy Secretary Vincent Perez, Ms Arroyo said she discovered that “the one (priority) we have not achieved is the pipeline.”

“Shell was supposed to produce the pipeline. But apparently they had some technical problems with (their equipment) so I want to open up (the pipeline project),” she said.

“Oil was the cheapest fuel for a long time. Even if it brought about global warming, everybody used it. But now the price of oil has gone up, (so alternative fuels like) geothermal become relatively cheaper,” she said.

But for the natural gas to be used by everybody, the government must draw in new capital, she said.

Originally published by Philippine Daily Inquirer website, in English 25 Mar 08.

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