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Aboitiz pioneers biogas-for-transport venture in PH

Aseagas Corp of the Aboitiz Group is investing $50 million in a biogas plant targeting the emerging gas-run transport sector that is centered on large fleets of heavy vehicles.

Company officials said at a briefing that Aseagas was set to complete the biogas plant—the first in Asia and second in the world not counting one in the UK—around the end of 2015. The plant can produce 9,000 metric tons of liquid bio-methane per year, to be sold as liquefied natural gas or LNG also by end-2015.

This is the first biogas-for-transport venture for the Aboitiz group and is a pioneering business model in the Philippines, officials said.

Aseagas president and CEO Sabin M. Aboitiz said at a news briefing that the plant would be located in Lian, Batangas, in an area near industrial firms that can supply Aseagas with organic waste for a fee. It is also near the port of Batangas, which government is pushing as a cargo transport hub to ease congestion at Manila’s two ports.

The plant will be built beside the distillery of Absolut Distillers Inc. (ADI), a subsidiary of Tanduay Holdings Inc, Aboitiz said.

Initially, ADI will be selling organic waste to Aseagas under a 25-year effluent waste supply agreement signed in September 2013. Construction of the biogas plant is to start in June.

Financing will be offered to fleet owners who want to build up capacity in gas-run vehicles, which is seen to offer savings since Aseagas will be selling LNG fuel at a price cheaper than diesel.

Company COO Juan F. Alfonso said the supply agreement with ADI provides Aseagas with a stable source of organic material during its 25-year renewable energy contract with the Department of Energy.

Waste supply agreements can also be concluded with other sources such as agriculture firms offering farm waste and even landfill operators, the officials said.

As for potential clients besides cargo transport companies serving the Batangas port, Aboitiz said Aseagas can built a few LNG outlets in select industrial hubs such as Subic, where transport and logistics company fleets can have access to their fuel.

Aseagas can also build biogas plants in other parts of the Philippines and even in other countries in Asia using the same technology, Aboitiz said.

Aseagas is a joint venture formed in 2012 between Aboitiz Equity Ventures and Gazasia Ltd., a UK-based alternative fuel company, providing waste-to-fuel solutions.

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