NATURAL GAS INDUSTRY

Natural gas will connue to be one of the countrys strategic fuel alternave to oil as it will add to energy security posion and sustainable development as the country moves away from oil. Natural gas from the Malampaya oshore gas eld in Palawan has become the countrys major fuel for power generaon. It is ulized for power generaon by three power plants located in Batangas namely; the 1,200 MW Ilijan, 1,000 MW Sta. Rita and the 500 MW San Lorenzo gas-red plants. In 2008, the three power plants consumed a total of 123,604 MMSCF generang about 19,603 GWh of electricity. This accounts for approximately 44 percent of the total power generaon mix in the Luzon grid and at least 34 percent of total gross generaon naonwide. In support of the governments expanded use of natural gas for non-power, the Pilipinas Shell Petroleum Corporaons renery is now using natural gas for its renery fuel. Likewise, the use of compressed natural gas (CNG) in public ulity buses is strongly being pursued by the government. Given the projected contribuon of natural gas to the countrys energy security and environment agenda, the government is determined to pursue development of the natural gas industry to make gas available to a wider base of customers by 2011. With the long term goal of tapping this clean energy for applicaons other than power generaon, the government will provide an enabling environment to encourage greater private sector parcipaon in its development.

NATURAL GAS

Gas Supply and Market Potential

The hydrocarbon potenal of the Philippines is sll under explored and the proven gas reserves in the Malampaya gas eld is esmated at 2.7 trillion cubic feet (TCF). Further, assessment of the petroleum resources in the Philippines indicates potenal gas resources of up to 25 TCF. While 16 sedimentary basins in the country have been idened, the proven reserves so far are in the Northwest Palawan basin where the Malampaya gas eld is located. The recently declared addional supply of natural gas available from Malampaya has sparked more interest from industry players and potenal buyers of gas. The Philippines is strategically situated within the internaonal LNG trade route and thus could potenally source its gas imports from its gas-rich neighbors in the Asian region. The use of natural gas in all sectors of the economy is connuously promoted taking advantage of the latest and most ecient technologies e.g. conversion of oil thermal plants, greeneld power plants, in cogeneraon, district cooling, CNG, crop drying and industrial estates, etc.

Infrastructure Requirements
The development and or expansion of the downstream natural gas market heavily relies on the necessary infrastructure. This includes the construcon of a gas transmission and distribuon pipeline networks including their related facilies such as LNG terminals, CNG relling staons and their respecve ancillary facilies that would enable exisng and new gas supplies to be developed and linked to the potenal demand centers. The following are the idened crical gas infrastructure projects that will be constructed primarily in Luzon where demand concentraon for natural gas is projected to be highest in the next ten years.

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1) Batangas to Manila Natural Gas Transmission Pipeline (BatMan 1)

KEY INFORMATION KEY INFORMATION KEY INFORMATION Descripon Descripon Descripon Locaon Locaon Locaon Potenal Market Potenal Market Potenal Market
Esmated Project Esmated Project Cost (in billion pesos) Esmated Project Cost (in billion pesos) Developer (% equity) Cost (in billionequity) Developer (% pesos) Target Compleon Developer (% equity) Target Compleon Target Compleon Status Status Status
KEY INFORMATION KEY INFORMATION KEY INFORMATION Descripon Descripon Descripon Locaon Locaon Potenal Market Locaon Market Potenal Esmated Project Potenal Market Esmated Project Cost (in billion pesos) Esmated Project Cost (in billion pesos) Developer (% equity) Cost (in billionequity) Developer (% pesos) Target Compleon Developer (% equity) Target Compleon Target Compleon Status Status Status

NATURAL GAS

80 100 km high-pressure gas transmission pipeline that will service the converted Sucat thermal plant; 80 100 km high-pressure gas transmission pipeline that will service the converted Sucat thermal plant; ecozones and industries along the route. The project is planned to be implemented by zones: 80 100 km high-pressure gas the route. The projectthat will service the converted Sucat thermal plant; ecozones and industries along transmission pipeline is planned to be implemented by zones: Zone 1: Batangas-Bian (2011); Zone 2: Rosario-Bian (2013); and Zone3: Bian-Sucat (2013) ecozones and industries along the route.Rosario-Bian (2013); and Zone3: Bian-Sucat (2013) Zone 1: Batangas-Bian (2011); Zone 2: The project is planned to be implemented by zones: Tabangao, Batangas Sucat, Paraaque (Metro Manila) Zone 1: Batangas-Bian (2011); Zone 2: Rosario-Bian (2013); and Zone3: Bian-Sucat (2013) Tabangao, Batangas Sucat, Paraaque (Metro Manila) 850 MW Sucat Power Plant for conversion to natural gas ring or natural gas requirement equivalent to 41 Tabangao, Batangas Plant for conversion to natural gas ring or natural gas requirement equivalent to 41 850 MW Sucat Power Sucat, Paraaque (Metro Manila) MMscfd 850 MW Sucat Power Plant for conversion to natural gas ring or natural gas requirement equivalent to 41 MMscfd MMscfd Non-Sucat consist of ecozones and industries along the pipeline route with an esmated natural gas Non-Sucat consist of ecozones and industries along the pipeline route with an esmated natural gas requirement of 45.5 MMscfd Non-Sucat consist of MMscfd and industries along the pipeline route with an esmated natural gas requirement of 45.5 ecozones requirement of 45.5 MMscfd Php 5.88 Php 5.88 Php 5.88 PNOC, open for private sector partnership PNOC, open for private sector partnership 2010 -2013 PNOC, open 2010 -2013 for private sector partnership Revival of discussions with industrial estate developers, large industrial manufacturing plants and dedicated 2010 -2013 Revival of discussions with industrial estate developers, large industrial manufacturing plants and dedicated power developers, LGUs and other stakeholders to rm up gas market Revivaldevelopers, LGUs and other stakeholders to rm large industrial manufacturing plants and dedicated power of discussions with industrial estate developers, up gas market power developers, LGUs and other stakeholders to rm up gas market

1.1 Zone 1 : Batangas - Bian

An 80 km high-pressure pipeline that transport gas to industries, ecozones and transport sector along the An 80 km high-pressure pipeline that transport gas to industries, ecozones and transport sector along the pipeline route from Batangas to Bian, Laguna. An 80 km high-pressure pipeline Bian, Laguna. gas to industries, ecozones and transport sector along the pipeline route from Batangas to that transport pipeline route from Laguna to Bian, Laguna. Batangas to Bian, Batangas Batangas to Bian, Laguna Ecozones, industries and transport sector along the pipeline route from Batangas to Bian, Laguna Batangas to Bian, Laguna Ecozones, industries and transport sector along the pipeline route from Batangas to Bian, Laguna Ecozones, industries and transport sector along the pipeline route from Batangas to Bian, Laguna Php 3.36 Php 3.36 Php 3.36 PNOC, open for private sector partnership PNOC, open for private sector partnership 2011 PNOC, 2011 open for private sector partnership Revival of discussions with industrial estate developers, large industrial manufacturing plants and dedicated 2011 of discussions with industrial estate developers, large industrial manufacturing plants and dedicated Revival power developers, along the Batangas-Bian leg to rm up gas market. Revivaldevelopers, along the Batangas-Bian leg to rm large industrial manufacturing plants and dedicated power of discussions with industrial estate developers, up gas market. power developers, along the Batangas-Bian leg to rm up gas market.

1.2 Zone 2 : Rosario Bian (Robin) KEY INFORMATION

KEY INFORMATION KEY INFORMATION Descripon Descripon Descripon Locaon Locaon Potenal Market Locaon Market Potenal Esmated Project Cost (in Potenal Market Cost (in Esmated Project billion pesos) Esmated Project Cost (in billion pesos) Developer (% equity) billion pesos) Developer (% equity) Target Compleon Developer (% equity) Target Compleon Status Target Compleon Status Status
A 35 km high-pressure pipeline that transport gas to industries, ecozones in Rosario and Bian A 35 km high-pressure pipeline that transport gas to industries, ecozones in Rosario and Bian (RoBin) and also links Batman 1 and Batman 2. A 35 kmand also links Batman 1 that transport gas to industries, ecozones in Rosario and Bian (RoBin) high-pressure pipeline and Batman 2. Rosario, Cavite to Bian, Laguna (RoBin) Cavite to Bian, Laguna Rosario,and also links Batman 1 and Batman 2. Ecozones and industries in Rosario, Cavite and Bian, Laguna Links Batman 1 and 2 Rosario, Cavite to Bian, in Rosario, Cavite and Bian, Laguna Links Batman 1 and 2 Ecozones and industries Laguna Ecozones and industries in Rosario, Cavite and Bian, Laguna Links Batman 1 and 2 Php 1.47 Php 1.47 Php 1.47 open for private sector partnership PNOC-EC; PNOC-EC; open for private sector partnership 2013 PNOC-EC; open for private sector partnership 2013 Zone 2 of the Batman 1 prole 2013 2 of the Batman 1 prole Zone Zone 2 of the Batman 1 prole

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1.3 Zone 3 : Bian - Sucat

KEY INFORMATION KEY INFORMATION Descripon Descripon Locaon Locaon Potenal Market Potenal Market Esmated Project Esmated Project Cost (in billion pesos) Cost (in billion pesos) Developer (% equity) Developer (% equity) Target Compleon Target Compleon Status Status
A 25 km high-pressure pipeline that transport gas to Metro Manila, industries, and ecozones in Bian, A 25 km high-pressure pipeline that transport gas to Metro Manila, industries, and ecozones in Bian, Laguna and Sucat Laguna and Sucat Rosario, Cavite to Bian, Laguna Rosario, Cavite to Bian, Laguna Converted Sucat Power Plant, ecozones, industries along the pipeline route from Bian, Laguna to Sucat. Converted Sucat Power Plant, ecozones, industries along the pipeline route from Bian, Laguna to Sucat. Php 1.05 Php 1.05 PNOC-EC; open for private sector partnership PNOC-EC; open for private sector partnership 2013 2013 Zone 3 of the Batman 1 prole Zone 3 of the Batman 1 prole

2) Compressed Natural Gas (CNG) Relling Stations

KEY INFORMATION KEY INFORMATION
Descripon Descripon
Locaon Locaon Potenal Market Potenal Market Esmated Project Esmated Project Cost (in billion pesos) Cost (in billion pesos)
Developer (% equity) Developer (% equity)
Target Compleon Target Compleon
Status Status

Mix of nine (9) units of mother and daughter relling staons that will provide the CNG requirement of the Mix of nine (9) units of mother and daughter relling staons that will provide the CNG requirement of the transport sector in Metro Manila and neighboring provinces. transport sector in Metro Manila and neighboring provinces. Metro Manila; Batangas; Rosario, Cavite; Bian, Laguna Metro Manila; Batangas; Rosario, Cavite; Bian, Laguna 1,000 CNG Vehicles by 2014 1,000 CNG Vehicles by 2014
Php 0.9 for 9 units Php 0.9 for 9 units
40% foreign; 60% domesc 40% foreign; 60% domesc Priority for private sector investment Priority for private sector investment One unit every year starng 2010 - 2015 One unit every year starng 2010 - 2015 The exisng CNG mother and daughter relling staons are targeted to provide the pilot 200 CNG Buses The exisng CNG mother and daughter relling staons are targeted to provide the pilot 200 CNG Buses under the Natural Gas Vehicle Program for Public Transport (NGVPPT) under the Natural Gas Vehicle Program for Public Transport (NGVPPT)

NATURAL GAS

3) Integrated Bataan LNG Receiving Terminal, Natural Gas Pipeline (BatMan 2) and Power Project
KEY INFORMATION

Descripon

Locaon

a) BatMan 2: a 140km high pressure pipeline with possible anchor markets including the Limay combinedcycle power plant converted into a natural gas-red plant, economic zones parcularly Subic route. Batman 2 would be fed from an LNG receiving terminal located in the Bataan Peninsula. b) LNG Terminal: It will serve as receiving, storage and re-gasicaon facilies of imported LNG. Aside from supplying fuel for power plants, the facility will extend the availability of natural gas in Central Luzon, to the various economic zones situated in Bataan, Zambales and Pampanga provinces. The LNG terminal would also ensure sustainable gas supply beyond the life of the Malampaya gas eld. This receiving terminal could provide for gas supply to Metro Manila via the Bataan-to-Cavite oshore pipeline traversing Manila Bay and could even provide supply to Batman 1 Bataan to Metro Manila

Potenal Market

600 MW Limay Power Plant (94.8 mmscfd) 500 MW Greeneld Power Plant (798 mmscfd) 600 MW Greeneld Power Plant (94.8 mmscfd) 30 MW Angeles City Power Plant (4.7 mmscfd) 116 MW Subic Power Plant (18.33 mmscfd) 50 MW Mabalacat Power Plant (7.9 mmscfd) 150 MW Rosario Power Plant 923.7 mmscfd)

Esmated Project Cost (in billion pesos) Developer (% equity) Target Compleon

BatMan 2: Php 5.88; LNG Terminal : Php 18.75

PNOC-EC; open for private sector partnership 2015

Status

Firming up business plan for BatMan 2 and LNG aligned with the plans for BatMan 1 The conduct of Feasibility Study (FS) is for bidding. Preparing publicaon of Informaon Memorandum on joint venture pursuant to the NEDA Guidelines for prospecve investors interested to partner with PNOC for the project.

KEY INFORMATION

Descripon

Locaon

Potenal Market

A 40-km undersea high pressure gas transmission pipeline to service the Sucat plant and the co-generaon needs of industrial zones in Cavite Province Bataan Peninsula to Metro Manila or Cavite Province (BatCave) Sucat plant and cogeneraon needs of industrial zones in Cavite province will link BatMan 2 and Rosario-Bian (RoBin) pipeline to provide connuity of supply to Bataan and Metro Manila areas.

Esmated Project Cost (in billion pesos)

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Php 1.68

Developer (% equity)

Foreign: 40%, Domesc: 60%

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Developer (% equity) Target Compleon

Status

PNOC-EC; open for private sector partnership 2015

Firming up business plan for BatMan 2 and LNG aligned with the plans for BatMan 1 The conduct of Feasibility Study (FS) is for bidding. Preparing publicaon of Informaon Memorandum on joint venture pursuant to the NEDA Guidelines for prospecve investors interested to partner with PNOC for the project.

4) Bataan Cavite Transmission Pipeline (BatCave)

KEY INFORMATION
Descripon
Locaon
Potenal Market
Esmated Project Cost (in billion pesos)
Developer (% equity)
Target Compleon Status

A 40-km undersea high pressure gas transmission pipeline to service the Sucat plant and the co-generaon needs of industrial zones in Cavite Province Bataan Peninsula to Metro Manila or Cavite Province (BatCave) Sucat plant and cogeneraon needs of industrial zones in Cavite province will link BatMan 2 and Rosario-Bian (RoBin) pipeline to provide connuity of supply to Bataan and Metro Manila areas.
Php 1.68
Foreign: 40%, Domesc: 60% Priority for private sector investment 2020 No proponent yet

5) EDSA Taft Gas Transmission Pipeline (ET Loop)

KEY INFORMATION

Descripon

NATURAL GAS

Locaon

Potenal Market

A 40 km city gas pipeline along Metro Manilas main artery (EDSA-Ta (ET) Loop) to service large commercial users and the transport sector EDSA Ta Loop Metro Manila Nine (9) retailing staons for public ulity and private vehicles. It is esmated that there will be total 0f 2,600 public vehicles running on CNG by 2020. 100 MW esmated capacity requirement for cogeneraon in major commercial building along the loop.

Esmated Project Cost (in billion pesos)

Php 1.47

Developer (% equity)

Target Compleon

Foreign: 40%, Domesc: 60% Priority for private sector investment 2020 or earlier

Status

BatMan 1 which is expected to supply gas to ET loop is expected to be completed in 2013. Feasibility study to determine the techno-economic viability of a city-gas distribuon pipeline along the ET loop is not yet undertaken

NATURAL GAS VEHICLE PROGRAM FOR PUBLIC TRANSPORT (NGVPPT)

The rst CNG daughter staon was inaugurated in October 2007 kicked-o the operaon of 26 CNG buses plying the route of Metropolitan Manila to Laguna/Batangas. This is part of the targeted 200 buses for the 7-year pilot phase. The government aims to come up with 1,200 buses by 2015, 2 CNG mother staons and 6 CNG daughter staons. Based on the inter-modal plan of the Department of Transportaon and Communicaon, the possible locaons for a CNG Daughter staon is either in Pasay City (near Mall of Asia) or Quezon City (near SM North EDSA). The investment cost for a CNG refueling staon (mother & daughter) is approximately Php 500 million while the Original Equipment Manufactured (OEM) bus costs between Php 5 to Php 6 million each and repowering/retrong a CNG bus would be around Php 3.5 million.

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