Pandacan phase out to take five years -- oil firms
By Tetch Torres
INQUIRER.net
First Posted 18:43:00 05/13/2008
Filed Under: Oil & Gas - Downstream activities
MANILA, Philippines -- (UPDATE) The three oil companies have finally agreed to move their depots out of Manila’s densely populated Pandacan district, but the relocation will take about five years.
In its 20-page Pandacan Comprehensive Relocation Plan, Caltex Philippines Inc. (now Chevron), Petron Corp. and Pilipinas Shell Petroleum Corp. also said the transfer would jack up oil prices.
"Due to farther distance of these base locations to the market, provision of additional land-based transportation resources is necessary to ensure continuous supply of fuel products in Metro Manila,” the firms told the Supreme Court and the Manila Regional Trial Court.
“It can also translate to higher delivery costs because the base locations are more than 100 kilometers away from Metro Manila," they said.
The Supreme Court ordered March last year the closure of the 30-hectare Pandacan oil depot that the three big oil companies are using because it could be a terrorist target.
The oil firms laid out their options for relocation.
One option is the creation of a multi-depot, a combination of inland and coastal depots. Facilities of refinery depots will also be expanded.
Under this option, they will use their existing refinery depots, which include Petron's Limay, Shell's Tabangao, Chevron's San Pascual oil terminals, and secondary sites, which include Petron's Rosario and Navotas depots.
"This relocation requires significant capacity upgrades of the multiple sites in order to support the volume requirement of the Pandacan market."
Another option is putting up a depot along the coastal areas of Manila Bay, covering Manila, Navotas, Paranaque, Cavite and Bulacan.
An inland depot along Batangas-Manila oil Pipeline owned and operated by the First Philippine Industrial Corp. (FPIC) is also being considered.
The underground pipeline starts from Shell's refinery and Chevron’s import terminal in Batangas Bay.
The transfer has three phases and could take a minimum of five years, they said.
The first phase, which the firms called as Controlled Phase I, will take one-and-a-half years. It covers project development, finance planning and internal approvals.
Next is the second uncontrolled phase, which involves site selection, government actions and site acquisition.
The final phase, Controlled Phase 2, is a three-year period allotted for site-specific design and engineering and construction.
In dismissing the appeal filed by the oil firms and the Department of Energy, the Supreme Court took note of the January incident when a defective tanker containing 2,000 liters of gasoline and 14,000 liters of diesel exploded near the exit gate of the Pandacan oil depot, which left one person dead, another injured and several vehicles damaged.
"Need we say anything about what will happen if it is the estimated 162 to 211 million liters of petroleum products in the terminal complex which blow up?" the high court said.
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