PNOC says will negotiate sale of its banked gas

PHILIPPINE National Oil Co. (PNOC) will be negotiating the sale of its banked gas amounting to 97.67 petajoules at a lower price than what it was willing to sell before.

“Ibibigay ko sa pinakamataas at magbabayad agad (I will award it to the one with the highest offer and who will pay immediately),” PNOC President and Chief Executive Officer Reuben S. Lista told reporters at the company’s head office at the Bonifacio Global City, Taguig.

This year, the government corporation twice invited buyers for the banked gas but none came forward with an offer.

Mr. Lista said he would seek authorization from the PNOC board to allow management to enter into “comprehensive discussions” or “negotiations” at a price lower than the $6.616 per gigajoules under the Ilijan gasfired power plant’s gas sale and purchase agreement (GSPA). A petajoule is equal to a million gigajoules.

Under a negotiated deal, the Ilijan price will become PNOC’s price ceiling, he said.

Mr. Lista disclosed that First Gen Corp. offered to buy the gas at $4.50 per gigajoules during a verbal discussion, but when a formal invitation was made, the Lopez-led group offered $3.48 per gigajoules.

He said First Gen and its subsidiaries Prime Meridian Powergen Corp. and First Natgas Power Corp. were keen on the banked gas. The units own the 97-megawatt (MW) Avion and 414-MW San Gabriel gas-fired power plants, respectively.

As of Monday, Mr. Lista said the price of natural gas in the international market was at $9.47 per gigajoules, making PNOC’s expected price ceiling an attractive proposition for interested buyers.

PNOC last month posted in its website an invitation for interested parties to submit offers to buy its banked gas amounting to 97.67 petajoules. The deadline was set for Sept. 3. It previously valued the banked gas at P11.9 billion.

The gas, which was paid by the government for its future use, is banked in the reservoir of the Malampaya deepwater gas-to-power project offshore Palawan. A PNOC unit is part of the consortium that developed and operates the project.

The banked gas was bought by PNOC from the Department of Energy in 2009, including all the rights, benefits and entitlements of the total 108.6 petajoules valued at P14.4 billion.

The corporation since then has been trying to sell the gas but was only able to sell 4.61 petajoules to Power Sector Assets and Liabilities Management Corp. in 2013 for P937 million. Another portion at 6.324 petajoules was sold to Pilipinas Shell Petroleum Corp. in 2015 for P2.5 billion. —