Cusi sets special PNOC board meeting for ‘banked gas’ sale

Published January 29, 2019, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2019/01/29/cusi-sets-special-pnoc-board-meeting-for-banked-gas-sale/

A special board meeting of the Philippine National Oil Company (PNOC) is being slated next week on the directive of Energy Secretary Alfonso G. Cusi for the state-run firm to primarily tackle the planned sale of its banked gas.

 “I will call for a special board meeting, because I have that scheduled especially for the banked gas,” the energy chief said. Cusi also sits as the chairman of the PNOC Board.

He told reporters that he had instructed PNOC management through its chief executive Admiral Reuben Lista to “submit their recommendation,” as well as their studies and options on how the State can viably unload the banked gas under its possession.

The mandate he had given to PNOC, according to Cusi, was “once for all, make your summarized position and your recommendation within the next two weeks.” The last meeting of the PNOC board was January 18.

It must be recalled that PNOC offered its banked gas for auction twice last year – but divestment stalled because it was not able to fetch a tender that should have at least matched the Ilijan gas price or higher.

The state-run company indicated that it cannot accept an offer below the Ilijan gas price because there’s an existing policy that ties its hands to it – and that stays unless the PNOC board would decide to have it relaxed or modified.

Based on the numbers previously crunched by the company, it targets to raise as much as US$750 million to US$800 million from the sale of the banked gas – the proceeds of which can eventually be re-aligned for PNOC’s planned investments.

At this stage, Cusi places the media on guessing-game as to how the government-run firm will eventually decide on unloading the gas asset.

“I want to wait for the recommendation of the management. To be honest, I studied the matter but I don’t want to go there and lecturing them,” the energy chief stressed.

The banked gas under PNOC’s hold had been the fuel supply originally intended for the1,200-megawatt Ilijan plant – but due to transmission constraint at the initial years of its operations, there had been accumulated gas that had been unutilized for some years.

The gas was previously under the ownership of state-run National Power Corporation (NPC), but it opted to dispose it to PNOC during the Arroyo administration within the purview of government-to-government transaction.