QUARTERLY INDUSTRY NEWS DIGEST
Contingencies In Effect Over Pipeline Shutdown www.doe.gov.ph
October 29, 2010 (Taguig City) Persistent oil leaks in the basement of the West Tower Condominium, located in Barangay Bangkal, Makati City, have led to the shutdown of First Philippine Industrial Corporation’s (FPIC) pipeline operations traversing the area. It is remembered that in July 12, when it was first detected, oil leaks were found in the basement of the abovementioned condominium. The Makati City government also created an inter-agency committee to investigate the source of the oil leak. FPIC is the operator of the country’s largest commercial oil pipeline that transports petroleum products from refineries in Batangas province to the Pandacan oil depot in Manila.
Junjun Binay, emphasized that the immediate solution that everyone is looking into is determining the source of a leak and stop it with finality. She also stated that Mayor Binay foresees the pipeline shutdown to last for at least seven (7) days. She added that while the shutdown may affect the price of petroleum product, market forces will determine the price. The agency has vowed that it will closely monitor the situation to ensure that supplies of petroleum products will still be available in Metro Manila and areas directly affected by the closure.
Directly affected by the shutdown are operations by Pilipinas Shell and Chevron Philippines, Inc. The pipeline shutdown will affect 50 to 60% of Chevron’s supply. Likewise, Pilipinas Shell’s supply will be affected by 60%. Chevron has presented alternatives to shipping its petroleum products. It has proposed that trucks to Batangas and Poro will serve North and South Luzon; this method will be able to serve 25 to 30% of the Pandacan volume. Chevron has also proposed the use of barges in the shipping of gasoline, kerosene, and diesel; this will serve 25 to 30% of its requirement. The oil company will face a different concern in the transport of jet fuel as this will need a dedicated barge. FPIC’s shutdown, on the other hand, will directly affect Shell’s 715 stations from regions I-IV, including Metro Manila. Shell has determined that it will use the same methodology as Chevron with the use of trucks and barges in the shipping of its petroleum products. The Department of Energy (DOE), on its part, has already requested from the Department of Transportation and Communications (DOTC) and the Metro Manila Development Authority (MMDA) assistance in lifting the truck ban in Batangas City and Metro Manila while the pipeline is nonoperational. DOE Undersecretary Loreta G. Ayson, who also attended the press conference of Mayor
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