First Gen still keen on buying PNOC’s banked gas

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FIRST GEN Corp. is still on buying the Philippine National Oil Co.’s (PNOC) banked gas after the latter did not respond to its earlier offer.

“We’re asking PNOC what happened. What’s the status of the bidding in July after they released an invitation for September. So it’s not clear with us,” Jerome H. Cainglet, vice-president and head of the gas business unit, told reporters during the two-day Powertrends 2018 conference in Pasay City.

“We did submit an offer before. We submitted back in July,” he said, without disclosing the value it offered. PNOC previously valued the banked gas at P11.9 billion.

Last month, PNOC posted on its website an invitation for interested parties to submit offers to buy its banked gas amounting to 97.67 Petajoules. It set the deadline for submission on Sept. 3, but there is no word on whether it received any offers.

Mr. Cainglet said PNOC had not made it clear whether their discussions would remain valid after the new invitation.

“If you ask PNOC, they would say it’s not a bidding because they are not required under CoA (Commission on Audit) rules to actually bid it out. They can just do whatever they please in terms of how they dispose of it, they can negotiate it,” he said, adding that the disposal is not subject to the government’s bidding rules.

Under the terms of its latest invitation, PNOC wanted the offered price to be in US dollars, exclusive of any applicable taxes, as well as the schedule of withdrawal of the banked gas. It also required the interested buyers to describe the intended use of the gas.

PNOC said at its sole discretion, it reserves the right to accept or reject any or all offers to buy the banked gas. It said it can also suspend or cancel the sale of the banked gas at any time without any reason or liability.

Mr. Cainglet said First Gen had expressed interest in PNOC’s banked gas when it was first offered in 2015, when the two parties had joint negotiations in 2016, and when the state corporation asked for an offer in July this year.

PNOC did not immediately respond to a query on the outcome of its latest invitation for buyers of banked gas.

The banked gas was bought by PNOC from the Department of Energy in 2009, including all the rights, benefits and entitlements of the total 108.6 Petajoules valued at P14.4 billion.

The corporation since then has been trying to sell the gas but was only able to sell 4.61 Petajoules to Power Sector Assets and Liabilities Management Corp. in 2013 for P937 million. Another portion at 6.324 Petajoules was sold to Pilipinas Shell Petroleum Corp. in 2015 for P2.5 billion. — Victor V. Saulon