Maharlika, PNOC sign accord for strategic fuel reserve project in 2028

Sovereign wealth fund Maharlika Investment Corporation (MIC) and state-run Philippine National Oil Company (PNOC) are partnering to explore the development of a Storage Tank Farm Project in Bataan, which could mark the first step in realizing the strategic petroleum reserve initiative for the country.

In a news release on Thursday, MIC said it signed a memorandum of understanding (MOU), which establishes a general framework for cooperation between the two state-run firms to evaluate the potential development of a storage tank farm, with PNOC —the main agency tasked to implement the proposed national oil stockpiling program.

The agreement was signed by PNOC president and CEO Franz Josef George Alvarez and MIC president and CEO Rafael Consing Jr.

Under the accord, MIC will explore engaging private-sector partners and evaluating potential structures for the development, financing, construction, operation, and management of the proposed Storage Tank Farm Project.

MIC will also provide regular updates on the project's status.

PNOC, meanwhile, will make available relevant information and data, and provide reasonable access to its Bataan properties for the purpose of evaluating the project, subject to applicable laws, rules, regulations, and internal approvals.

“This MOU reflects PNOC’s continuing commitment to strengthen the infrastructure foundations of Philippine energy security. Through this partnership, we are taking a careful and disciplined first step in assessing how PNOC’s strategic assets in Bataan may support a more reliable, resilient, and future-ready petroleum supply system for the country,” said Alvarez.

“Energy security is national security. By exploring strategic petroleum storage capacity, MIC is helping prepare the country for supply disruptions, price volatility, and the growing energy needs of a modernizing economy,” said Consing.

Last month, Energy Secretary Sharon Garin announced that MIC and PNOC are finalizing an agreement on a national oil stockpiling program.

A national oil stockpile is a strategic reserve of crude oil and refined petroleum products maintained by the government.

EXPLAINER: What is national oil stockpiling?

It is akin to an emergency fund, but instead of cash, the government will holds millions of barrels of oil designed as a buffer against sudden disruptions such as geopolitical conflicts, natural disasters, and extreme price volatility.

A national oil stockpile is different from the fuel inventories maintained by the industry, which are mandated to maintain 15 days' worth of stock requirement.

The release of the national oil stockpile to the market could be triggered by the government when global oil supplies are choked to ensure supply continuity and prices are stable. —RF, GMA News