$1.5-B biofuel deal between PNOC-AFC, UK firm bogs down

The multi-billion dollar deal inked by PNOC-Alternative Fuels Corp. and London-based firm NRG Chemical Engineering Pte Ltd., on the development of jatropha as a fuel source in the country, has collapsed. A ranking official of the government's energy department said the $1.5-billion investment for the development of a "bio-refinery complex" did not materialize. The official spoke to reporters under the condition of anonymity. “We didn’t sign," the official said. He said PNOC-AFC failed to comply with NRG's requirements, which led to London-based firm to team up with another local firm instead. However, the official said that the government is in talks with seven to 10 other possible partners in the development of jatropha processing facilities in the country. The company is entertaining the possibility of putting up a jatropha refinery in Cagayan de Oro, he said, especially since best varieties of jatropha can be found in Mindanao . “How big the refinery will depend on our partners," he said. Last May, PNOC-AFC forged a memorandum of understanding with NRG for the construction of a bio-refinery complex which will have an initial capacity of 500,000 tons of biofuel before the end of the year. The complex was supposed to involve about 100 hectares of jatropha plantations, a refinery, and an ethanol plant. “So before the end of 2007, we are looking at completing our first biodiesel plant. The plantation will obviously take longer to plant and we're looking at the 100-hectares over about six to eight years to plant. The 3.5 million tons of capacity will be targeted for completion within three years," NRG representative Chris de Lavigne told reporters during the ASEAN Biofuels Conference held in Ortigas, Pasig four months ago. He said the P58.5 billion or $1.5 billion investment will be for the whole project, which includes the refinery costing $450 million, the jathropa plantations that will take $600 million and the rest will be for the ethanol plant. “So that's $200 million for the ethanol. So the total is roughly $1.2 billion to $1.25 billion over a five to six year timeframe," he added. - Marie Neri, GMANews.TV