Published
November 30, 2016, 10:01 PM By Myrna M. Velasco
Energy Secretary
Alfonso G. Cusi has revved up invitation to foreign investors for capital
re-channeling on the planned liquefied natural gas (LNG) infrastructure chain
of the Philippines.
In a recent speaking
engagement in Japan, the energy chief indicated that investment strategy will
shift to LNG facilities as it anticipates gas production decline or winding up
at the country’s Malampaya field.
Beyond on-grid demand,
he noted that gas may also be aligned as power source option for off-grid areas
– a distinctive feature of the archipelagic nature of the Philippine
electricity system.
Cusi noted there are
string of gas projects that the Japanese and other foreign investors can explore
– not just with the LNG handling facility and the proposed high pressure gas
pipelines but also for non-power applications of gas, such as in the transport
sector.
“As an emerging LNG
market in Asia, the Philippines can take advantage of the current period of
oversupply and the relatively low prices of LNG,” he said.
The missing links at
this point though are the regulatory and policy frameworks that must underpin
gas investments – a matter that the Department of Energy (DOE) is still working
on.
Cusi similarly enticed
the international gas investing community “to tighten partnerships in further
developing and promoting LNG industry.”
According to the
International Energy Agency (IEA), the share of LNG in the global gas market
“is set to increase in the coming years,” and had in fact been growing “at a
faster pace than total gas consumption.”
IEA Executive Director
Fatih Birol said “the growth in the global gas trade, along with the
diversification of supply sources, is improving the security of supply.”
Nevertheless, he
qualified that “there is still a need to be vigilant on gas security as the
changing nature of the market means that regional demand and supply shocks may
now be felt in more distant places than ever before,” – traced to be coming
generally from physical and technical constraints such as in the export of
extra gas capacity to target markets.
There has also been
changing dynamics in contracting arrangements for gas supply – with many buyers
now opting for more flexible terms in contracts.
“While shorter-term
contracts are gradually becoming more common, buyers are also accepting longer
contracts in exchange for increased flexibility in the final destination in
order to better respond to market conditions,” the IEA has noted.
It added that “flexible
contractual structures are important for gas security as they enable to
aggregate gas volumes at a lower cost from various regions.”
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