TO AVOID scampering for fuel supplies just like what happened in March onwards, the government through its sovereign fund and the Philippine National Oil Corporation (PNOC) agreed to consider the idea of establishing a fuel storage hub.
In a memorandum of understanding (MoU), the Maharlika Investment Corp. (MIC) and the PNOC would study the development of a petroleum storage tank farm in Bataan as part of efforts to strengthen the country’s energy security.
In a statement, MIC said the MoU establishes a framework for cooperation on the proposed project. As envisioned, MIC will engage private sector partners and evaluate potential structures for the development, financing, construction, operation, and management of the storage facility.
PNOC will provide relevant data and grant access to its properties in Bataan for project evaluation.
“By exploring strategic petroleum storage capacity, MIC is helping prepare the country for supply disruptions, price volatility, and the growing energy needs of a modernizing economy,” said MIC president/CEO Rafael D. Consing, Jr.
“This MoU reflects PNOC’s continuing commitment to strengthen the infrastructure foundations of Philippine energy security,” explained PNOC president/CEO Franz Josef George E. Alvarez.
“Through this partnership, we are taking a careful and disciplined first step in assessing how PNOC’s strategic assets in Bataan may support a more reliable, resilient, and future-ready petroleum supply system for the country,” he added.
MIC said PNOC’s properties in Limay and Mariveles, Bataan, have been identified for energy projects, making them potential sites for petroleum storage facilities, reported Business World.
The Philippines imports most of its fuel requirements, making it vulnerable to fluctuations in global crude oil prices.
“Energy security is national security. By exploring strategic petroleum storage capacity, MIC is helping prepare the country for supply disruptions, price volatility, and the growing energy needs of a modernizing economy,” said Consing.
Last month, Energy Secretary Sharon Garin announced that MIC and PNOC are finalizing an agreement on a national oil stockpiling program.
A national oil stockpile is a strategic reserve of crude oil and refined petroleum products maintained by the government. It is akin to an emergency fund, but instead of funds, the government will hold millions of barrels of oil designed as a buffer against sudden disruptions such as geopolitical conflicts, natural disasters, and extreme price volatility.
A national oil stockpile is different from the fuel inventories maintained by the industry, which are mandated to maintain 15 days’ worth of stock requirement.
The release of the national oil stockpile to the market could be triggered by the government when global oil supplies are choked to ensure supply continuity and prices are stable.