Published June 4, 2017, 10:00 PM By Myrna M. Velasco
Power utility giant Manila Electric Company (Meralco) indicated that it will need to restudy gas before taking a fresh plunge into it and integrating it as part of its overall power generation portfolio.
Meralco President Oscar S. Reyes qualified that while there had been previous discussions with prospective local and foreign partners, negotiations never reached a firm deal because of portended cost impact on consumers.
“So far, we still have to find the adequate basis to get into it (gas) because of the cost issues, so we are assessing whether it will provide better cost mix to Meralco,” he said.
While partnership talks with Osaka Gas and Lopez-owned First Gen Corporation stalled in recent years, Reyes emphasized that “we remained open” – at least to gas technology as future business proposition in the energy sector.
“We have been in discussions in the past. But so far, we have not concluded anything,” Reyes said, adding that the last touch they had with Osaka Gas was in fact two years ago.
He had given categorical statement though that there had been “no discussion” that happened so far between Meralco and state-run Philippine National Oil Company (PNOC) on proposed gas ventures.
Meralco’s pronouncement had been in sync with earlier claims made by PNOC President Reuben Lista that there had been no talks yet between the parties – even on preliminary basis.
The power generation arm of the utility firm had fundamentally considered gas-fed technology in one of its power plant projects – but had a turnaround after crunching the numbers and assessing what impact these would have on consumers’ pockets.
The Philippines though may need to critically advance on its gas investment reset with the anticipated decline of gas production at the Malampaya field at the culmination of its life cycle come year 2024.
Nevertheless, policy and regulatory frameworks are still being studied and fleshed out by the government, hence, many investors are also on a “wait-and-see-stance” at this point.
As far as the Department of Energy (DOE) is concerned, it wants state-run PNOC to lead the way in the fresh round of gas infrastructure investments, primarily the proposed setting up of liquefied natural gas (LNG) import terminal.