Pangilinan-led Metro Pacific Investments Corporation (MPIC) is eyeing a Metro Manila expansion of the 84-kilometer pipeline, which is part of the oil import facility of Philippine Coastal Storage and Pipeline Corporation (PCSPC) that the company acquired last year, in anticipation of growing demand.
MPIC invested in the facility along with Keppel Infrastructure Trust (KIT) in a merger and acquisition (M&A) deal concretized last December. The sale and purchase agreement (SPA) was sealed with the Philippine Investment Alliance for Infrastructure (PINAI), an investment fund managed by Macquarie Infrastructure and Real Assets.
MPIC initially has 20 percent stake in the PCSPC acquisition, but there have been discussions with its partner KIT for it to be given an option to increase its equity to 50 percent.
“There’s a pipeline from Subic to Clark to deliver our oil through pipes, that’s cheaper, expand the pipeline to Metro Manila…we’ll find a site because that’s a cheaper way of conveyance,” MPIC Chairman Manuel V. Pangilinan said.
He added that the targeted pipeline expansion may also be a prudent investment step relative to the plan of the conglomerate’s energy group to eventually venture into gas.
“There are already plans to expand elsewhere,” Pangilinan indicated, although he qualified that further studies are still being carried out and project blueprints have yet to be firmed up. The pipeline currently stretches from the PCSPC oil terminal in Subic to the POL (petroleum, oil and lubricants) tank farm at the Clark freeport zone.
On the oil import terminal component of PCSPC business, Pangilinan noted that expansion plans are also being sorted, so its distribution points will be strategically dispersed nationwide.
“What we need to do is expand its network throughout the country – the key economic areas, like of course Davao, Northern Mindanao, Cebu and parts of Luzon,” he pointed out.
Pangilinan asserted “We have a more panoramic view why we have invested. It’s an attractive one because, as I understand it, the refineries have started to shut down. Unfortunately, this country is importing all of its finished petroleum products and that’s sad.”
Because of that industry predicament, he stressed the need to grow its import terminal facility and the oil pipeline because the country will be relying more on imported petroleum products as local oil refineries are closing operations.
“We want to grow the business and I think, this is something that the country needs moving forward because we still need to import most of our petroleum products,” he said.
In the longer term investment trajectory of the MVP group, Pangilinan emphasized that the PCSPC acquisition will eventually be tied in to the planned gas facilities of the conglomerate – especially if there would be commercial gas discovery at their Recto Bank exploration venture.
The conglomerate, via its power generation investment arm Meralco PowerGen, has also been casting development plunge into gas-fired power generation facilities either in Subic or at a prospective site in Batangas.