Friday, August 4, 2017

Energy dep’t eyes private sector participation in LNG facility

Posted on August 03, 2017

THE Department of Energy (DoE) may turn to the private sector anew for the development of an integrated facility for liquefied natural gas (LNG) estimated to cost $2 billion.

Energy Secretary Alfonso G. Cusi, who chairs the board of Philippine National Oil Co. (PNOC), told reporters on Wednesday he has yet to receive a proposal from the state firm, which was evaluating offers from six countries to develop an LNG facility in the country.

“Wala pa... Hindi pa sila nakakapili,” Mr. Cusi said on the sidelines of the 48th founding anniversary of the National Electrification Administration in Quezon City.

PNOC Technical Adviser Arwin L. Ardon said last month that the company has received proposals from China, Japan, South Korea, Indonesia, Singapore and the United Arab Emirates.

PNOC had aimed to submitted a recommendation to the DoE by the end of July.

Asked if the government is now open to accepting unsolicited proposals from the private sector, Mr. Cusi replied: “Yes, we will open (the project to the private sector) to get what is really beneficial for the country.”

Before the LNG facility became a government-to-government project, the PNOC had been swamped with unsolicited proposals from 55 domestic and foreign entities.

The DoE is sticking to its target of breaking ground on the LNG project next year despite the delay.

“Hahabulin namin ‘yan. Mas importante (We are pursuing that plan. It is more important) that we do it properly para sigurado na matatapos (so we can ensure its completion),” Mr. Cusi said.

The LNG “mega project” has several components, including gas storage facility with a capacity of five million tons per annum and a power plant with an initial capacity of 200 megawatts but scalable to 1,000 MW.

Aside from the storage facility and the power plant, the proponents submitted proposals for an integrated facility with components for liquefaction, regasification and a floating storage regasification unit, PNOC’s Mr. Ardon said.

In June, Mr. Cusi said the DoE was planning the construction of a common receiving and distribution infrastructure for LNG -- considered the “cleanest” of all fossil fuels -- that is aimed at making the country Southeast Asia’s hub for the energy resource. The facility is planned to rise on a PNOC-owned property in Batangas.

Mr. Cusi previously said the facility would cost around P100 billion and targeted for completion by 2020, which should give the country enough lead time ahead of the anticipated depletion of the Malampaya natural gas find in 2024. The offshore Palawan platform supplies gas to several power plants in Batangas. It powers up to 20% of the country’s electricity requirements.

After the DoE selects the winning proponent, the next step would be to evaluate the project cost, which will involve the National Economic and Development Authority, as well as the Department of Foreign Affairs. -- Krista Angela M. Montealegre

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