Pilipinas Shell Petroleum Corporation is still resolving several concerns, primarily pricing issue, before it can finally set in motion the commercial operation of its compressed natural gas (CNG) facility.

Shell, in collaboration with the Malampaya consortium under Service Contract 38 which includes Shell Philippines Exploration B.V., Chevron Malampaya LLC and Philippine National Oil Company-Exploration Corporation, committed to the government the establishment of a pilot mother-daughter CNG facility that would be integrated with refilling stations.

"We’re still waiting for agreements with Service Contract 38 to be finalized," Shell country chairman Edgar Chua said.

On top of this, he noted that bus companies which will be joining the initial rollout of 200 natgas vehicles are still securing their respective franchises.

Being a pilot project, the government set a policy direction that natural gas shall be sold cheaper than diesel, so the transport sector can gain benefits from the program, at least initially.

Shell said it already invested over $ 7.0 million for the project. The CNG technologies sourced from Argentina are still undergoing further testing to ensure their safety and efficiency once utilized.

The main safety concern was said to be on the mother station, but it is something that cannot just be dispensed with because this may eventually have knock-on effect on the entire facility.

The government has been working on strategies to accelerate the country’s program on natural gas utilization for the transport sector because of the cost of money already foregone for pre-ordered buses ahead of the availability of CNG fuel.

The Department of Energy (DoE) already made its own inspection of the CNG buses; which are expected to finally hit Metro Manila roads within this year.

The concern of the buses on loan repayments, according to DoE director Mario Marasigan, has already been resolved in discussions held with Shell.

In joining the government’s CNG vehicle rollout, the bus firms noted that they have secured loans of P2.5 million to P3.0 million; and these have been incurring interests while the operation of the mother-daughter facility has been experiencing delays.

The promotion and increased utilization of alternative transport fuels, including natural gas is in keeping with the government’s goal to lessen the country’s dependence on imported fuel; especially at the regime of surging global oil prices.

The energy department takes in the responsibility of providing assistance in the preparation of relevant study on the viability of investments in the Natural Gas Vehicle Program for Public Transport.

Qualified investor-applicants can be categorized as either engaged in the manufacturing or assembly, operation, retrofit or conversion and CNG refueling station operation for natural gas-fired vehicles. (MMV)