By Benjamin Cuaresma
MANILA — The United Arab Emirates (UAE) and Saudi Arabia are prepared to finance the construction of oil storage facilities in the Philippines, potentially giving the country priority access to petroleum supplies during major disruptions, the Department of Energy (DOE) said Friday.
DOE Oil Industry Management Bureau Director Rino Abad disclosed the offers during a Senate Committee on Energy hearing, saying both oil-producing nations expressed willingness to establish storage hubs using their own funds.
“Saudi Arabia will shoulder all the costs,” Abad told committee chair Senator Erwin Tulfo.
Tulfo said the UAE had also offered to build a facility in the Philippines at its own expense. While the proposed storage hub would remain under UAE ownership, he said it could provide the country with a readily available source of petroleum products during emergencies.
Under the proposed arrangements, the facilities would generally operate on a commercial basis. However, the DOE is seeking provisions that would allow the Philippines to exercise priority or reserve rights over the stored fuel whenever a supply crisis occurs.
“Our concern, in essence, is for us to be prioritized, that we have a reserve right when the time comes that there is a crisis,” Abad said.
The DOE has already submitted a concept note requested by Saudi Arabia for a proposed storage hub with a target capacity of up to 50 million barrels.
Abad said the newly established Philippine Strategic Petroleum Reserve team would continue talks with Saudi officials to determine the project’s implementation timeline and complete the remaining documentary requirements.
The UAE is expected to be formally approached next.
“We have already finished and submitted the requirements to Saudi Arabia, and now we will proceed with the United Arab Emirates,” Abad said.
The DOE official noted that Saudi Arabia and the UAE have long been among the Philippines’ petroleum suppliers. Both countries also have export routes that can provide alternatives to supplies passing through the Strait of Hormuz.
Meanwhile, the Philippine National Oil Co. (PNOC) is pursuing a separate government-owned strategic petroleum reserve in Bataan.
PNOC Deputy Manager Antonio Buenviaje said the facility is targeted for completion by 2027, initially holding one million barrels, with plans to eventually expand its capacity to 15 million barrels.
The initial reserve would cover only slightly more than two days of national petroleum consumption. Abad estimated Philippine demand at between 450,000 and 460,000 barrels per day.
Tulfo urged the DOE and PNOC to accelerate the administrative requirements for the projects, citing the need to strengthen the country’s petroleum buffer against disruptions in the international market.
“We need adequate reserves. We need to build our capacity to withstand external shocks,” Tulfo said.
ia/xf
