The Philippine National Oil Co. (PNOC) is eyeing legislative approval in its plans to create a national strategic petroleum reserve which will become the Philippines’ permanent oil stock pole.
In a Senate Committee on Energy hearing, PNOC president and CEO Jesus Cristino Posadas said that the study in establishing an SPR in the country is set to be completed by next year, as they are looking to onboard a transaction advisor for the project by the end of the year.
Posadas described the SPR as the “development of a permanent oil stockpile, especially in times of severe disruption of oil supply,” adding that the government “should be in a position to address a severe oil disruption that is over and above what is mandated as a minimum inventory requirement.”
Under the current scenario, Posadas said that the downstream oil industry is only mandated to hold a minimum inventory requirement of 30 days for refineries, 15 days for importers, and seven days for LPG.
The feasibility study will include the technical, legal, social, environmental, financial, and economic viability studies, as well as the risk assessment of developing and implementing a national SPR.
Should a national SPR be determined viable, PNOC stressed that the study should include potential sites, with consideration to all currently existing storage facilities that can be used to develop an SPR. Furthermore, the study should consider the construction of additional refineries and other infrastructure.
Through the Department of Energy (DOE) Memorandum Order 2019-11-0001, PNOC is mandated to conduct a feasibility study and come up with an implementation plan for the establishment and operation of the SPR.
Over a week ago, San Miguel Corporation’s South Premiere Power Corporation (SPPC) entered a gas supply agreement with PNOC for 70.26 petajoules of banked gas in daily volume to help run the Ilijan gas-fired power plant.