State-run Philippine National Oil Company (PNOC) has penciled in up to P5.0 billion worth of capital outlay for the repurposing of its Energy Supply Base (ESB) port facility in Mabini, Batangas, so it could be lined up for the logistics needs as well as to underpin support services to the thriving offshore wind industry in the country.

“There are many groups that have expressed interests - based on a very broad estimate, to repurpose our ESB port will cost about P5.0 billion,” PNOC President and CEO Oliver B. Butalid noted in an exclusive interview.

The ESB has been identified to be re-purposed as a marshaling or staging port that will cater to the offshore wind sector – primarily for the more complicated facet of their project development phases, such as those on the assembly as well as storage of wind turbine components.

The array of investors already approaching PNOC on prospective re-development of its ESB port include an investment fund that has its base in New York City; a company with headquarters in the United Arab Emirates; then Indian and Chinese firms as well as European investors that have expertise in port developments.

“We have two consultations already with the players, and they told us that we need 450-meter quay because our port now in ESB is of the typical warp for ordinary cargos – so we have to repurpose that to fit the requirements of the offshore wind industry,” he explained.

In line with that plan, Butalid indicated the company is now working on several processes and permits – including renewal of an application with the Philippine Reclamation Authority (PRA) for a portion of a property that has to be reclaimed for re-development of the port; then secure an environmental compliance certificate (ECC) with the Department of Environment and Natural Resources (DENR) by first quarter next year.

On the development blueprint being cast for PNOC’s ESB, he conveyed that they will need to tap prospective partner that has broad expertise in port development – and that shall be done through competitive bidding that is targeted by the first half of 2024.

The PNOC top executive said the likely partner could be a foreign firm because there is no Filipino company yet that has deep expertise when it comes to port support facilities for the offshore wind industry.

“The idea is: we have to partner with experienced port developer – and that could be done through PPP (public private partnership) or joint venture. We will structure it in a way that there will be a funder which will partner with an experienced operator, and PNOC will be the port owner,” he stressed.

Butalid expounded “our equity is already the port itself, plus the land preparation because we will need to flatten some hilly portions in the port -- that may cost several hundred million; and we already have a budget for that.”

The actual design for the propounded repurposing of the facility, he specified, will come from the proponent-developer that will be chosen through a bid process.

“We will make this less risky for the proponent, so we’re willing to recover our own cost once they have already recovered their investment – so we want to structure the transaction like that,” he stated.

The PNOC chief executive emphasized re-development at the ESB facility must already start next year, because the Department of Energy (DOE) is counting on its commercial operations by 2026-2027, in time for the first fixed bottom offshore wind farm that will be advancing to full development phase by then.

The current load bearing of the ESB facility, according to PNOC, is at 5.0 tonnes per square meter, but that needs to be upgraded to at least 30 tonnes per square meter so it can effectively meet the requirements of the offshore wind projects – primarily for the heavy cranes that will be used to move some of their equipment as well as other components in their installations.

“We’re quite excited that we will be the first of nine (9) ports to be in place because we will be servicing 27GW (gigawatts) of potential projects. And in a short period of time – two years, the idea is for us to be ready for the first fixed bottom that will supposedly be deployed by 2026-2027 – that’s what DOE told us,” Butalid asserted.