State-owned Philippine National Oil Company is seeking Congressional approval for its planned national strategic petroleum reserve (SPR) program that would serve as national oil stockpile in case of global emergencies.
Congressional approval is being sought by state-owned Philippine National Oil Company to create a national strategic petroleum reserve (SPR) to serve as the country’s permanent stockpile of oil.
At a Senate energy committee hearing on Wednesday, PNOC President/CEO Jesus Cristino P. Posadas described the reserve as the “development of a permanent oil stockpile, especially in times of severe disruption of oil supply, (just like what happened at the pandemic and the ongoing war of Russia in Ukraine).
According to PNOC’s website, the reserve fuel will be stored in facilities located around the country, with the possibility of putting up facilities overseas, Business World reported.
Posadas said that the move is in response to geopolitical events, calamities, or emergencies. He said PNOC is targeting to engage an SPR transaction advisor within the fourth quarter of 2022 and will release a feasibility study within nine months.
Data from PNOC’s website showed that the Department of Energy (DoE) through DoE Memorandum Order 2019-11-0001 mandated the company to conduct a feasibility study and formulate an implementation plan for the establishment and operation of the SPR.
“This endeavor is aligned to PNOC’s mandate and reason for its creation as a government corporation: to ensure an adequate and stable supply of oil and petroleum products for the country’s domestic needs,” PNOC said.
Posadas also said that the sale and monetization of its banked gas are consistent with the government’s efforts for additional power generation and contribute to electricity supply security.
He also said that PNOC and South Premiere Power Corp. (SPPC), a subsidiary of SMC Global Power Holdings Corp., entered a gas sale procurement agreement (GSPA) on June 23, 2022.
In a disclosure on Aug. 30, San Miguel Corp. (SMC) confirmed the purchase of the remaining banked gas of PNOC at 70.26 petajoules for $1.2 billion. The company said the purchase will support the projected fuel requirements of SPPC’s Ilijan power plant until February 2024.
“We are saddened that no delivery has been made on the sale of the remaining banked gas, that is the last remaining quantity of the total banked gas,” Posadas said.
Posadas said that the consortium behind Service Contract 38 and its operator, Shell Philippines Exploration B.V., had not heeded the directives of the DoE to deliver the quantity.
“They are giving us an excuse — the diminishing quantity of pressure of the banked gas reservoir, they are unable to deliver on that contract,” he said.
Tags: #PNOC, #SPR, #stockpile, #energy