by Myrna Velasco October 22, 2016
The local subsidiary of Royal Dutch
Shell plc is dangling a relatively cheaper and quicker-to-develop floating
storage and regasification unit (FSRU) technology as a viable solution for the
country’s proposed liquefied natural gas (LNG) import facility.
FSRUs are deemed lower cost
alternative compared to onshore LNG facilities. For instance, at $1.0 billion
land-based LNG terminal, the equivalent investment for FSRUs could just be at
$300 million to $400 million, according to experts.
Additionally, the installation
process would generally be faster at 2-3 years compared to four (4) years
minimum for onshore handling facility’s development.
Shell Philippines Country Chairman
Edgar O. Chua said they are currently exploring the viability of FSRU facility
for the country’s future gas needs. But cost assumptions are still being
crunched for that technology option compared to landed LNG terminal.
Chua said they are also evaluating
if they would need a partner for that propounded LNG venture – and what extent
of demand they should prepare for to serve.
“Shell is quite flexible in all of
these things. We’re not looking at doing it by ourselves,” he stressed.
The company executive added that
their investment blueprint could be anchored on “partnership with one or more
(investor groups).”
Initially, Chua said that the plan
will be for Shell to put up a separate corporate vehicle “to invest in LNG
import facility.”
The Philippine market’s shift to LNG
is seen crucial with anticipated production decline and lapse of the gas sale
and purchase agreements covered by the output of the Malampaya field.
Chua added the size of their
proposed facility “will depend on demand that we see in the market,” and
similarly reiterated that this “is something we are very much interested in
because we believe LNG provides a very good, clean alternative as far as fuel
for the future is concerned.”
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