The Three Reasons Why Entering the LNG industry was a Great Move by the Philippines

9. January, 2017 News No comments
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     1. Something to Replace Malampaya’s Role

The Malampaya deepwater gas-to-power project located offshore northwest of Palawan is Philippines’ only major gas field. It starts production in 2001 and supplies a huge 2700 Megawatts (MW) to three power plants in the Luzon Island. Malampaya is considered as an “ageing” field since depletion is projected by 2024. Also, the license of Malampaya operating under Service Contract (SC) 38 will expire on the same year. Luzon Island will run out of power. And if there will be no local gas fields discovered in the future, a facility to receive natural gas imports is required. Whether or not SC 38 will be extended or not, a LNG terminal is the best option to meet the country’s continuous and growing energy demand.

     2. Win-Win Solution

Ongoing projects and plans for LNG facilities involve huge financial investments. The LNG industry is indeed a win-win solution because it will bridge the gap of Philippines’ energy need while bringing investments to the country. Expression of interest and plans for LNG projects started to be surfaced out by Shell, Energy World, First Gen, Meralco and the government.

Shell’s local unit Pilipinas Shell Petroleum Corporation started working on a floating regasification unit (FSRU) to be constructed in Batangas Bay near the Shell Tabangao refinery. The facility could provide power as much as 2,000 megawatts (MW). Australian-listed company Energy World Corporation has finishing construction on its $800-million LNG hub. It is located on Pagbilao, Quezon province and could provide 400 MW. On the other hand, First Gen, a leading clean energy company revealed its plans for a $1 billion LNG terminal to be also located in Batangas City. The terminal to be built can handle 5 million tons of LNG, or an equivalent of 5,000 megawatts. First Gen currently opens the 40% of the $1 billion for local and foreign stakeholders. While Meralco (Manila Electric Co.) the largest local power distributor partnered with Japan’s Osaka Gas Co. Ltd. for a $2 billion integrated LNG project, covering a terminal and a power plant.

The Philippine government has eyes also on converting the mothballed Bataan Nuclear Power Plant (BNPP) into its main LNG receiving terminal, DOE secretary Alfonso Cusi said.“One of the projects that we will be undertaking is to put up an LNG receiving and distribution centre and that could be in Bataan. It could be converted” he said, adding the proposal.

     3.Change in Energy Mix

Philippines was one of the countries that agreed to a 70-percent reduction in greenhouse gas emission by 2030 at the United Nations Climate Change Conference in Paris. Since natural gas is considered the “cleanest” fossil fuel compared to coal and petroleum, it will take a bigger share on the country’s energy mix.

By Ray Francisdeo Romey

Bibliography:

http://www.rigzone.com/news/oil_gas/a/143648/Shell_Total_Mull_LNG_Terminal_Projects_in_the_Philippines/?pgNum=1

http://www.philstar.com/business/2016/09/14/1623461/doe-rolls-out-plan-lng-terminal

http://www.lngworldnews.com/ewc-to-start-up-lng-projects-by-end-2016/

http://breakingenergy.com/2015/05/29/philippines-to-finally-enter-lng-sector-with-first-receiving-terminals/

http://www.seatrade-maritime.com/news/asia/shell-philippines-seen-going-for-fsru-project-in-batangas-by-2017.html

http://thestandard.com.ph/business/216081/cusi-govt-to-lead-lng-terminal.html

http://www.bworldonline.com/content.php?section=Corporate&title=first-gen-eyes-foreign-partners-for-lng-terminal&id=134870

http://business.inquirer.net/199866/construction-of-lng-facility-to-start-in-2016#ixzz4RV3JB5Z1

http://www.naturalgasasia.com/philippines-mulls-converting-bataan-nuclear-power-plant-into-lng-terminal-18959

 

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