Published
By Myrna M. Velasco
DOE
NATGAS FORUM – Director Rino Abad, OIC for Department of Energy-Oil Industry
Management Bureau, responds to inquiries from participants during the Open
Forum of the first public consultation for the Philippine Natural Gas
Regulation (PNGR) held on October 10, 2017 at the DOE-Audio Visual Room in BGC,
Taguig City. The DOE PNGR public consultation aims to inform stakeholders and
to guide potential investors in the LNG industry.
The Department of
Energy (DOE) has listed multitudes of the “usual suspect companies” attending
the initial public consultation of its propounded regulatory framework of the
Philippine gas sector’s policy reset, but at its embryonic stage, this has not
been enough yet to whet targeted investors’ appetite.
Many interested parties
that had attended the government’s policy-setting consultation process had
indicated that “it was more of the government wanting inputs from stakeholders
for now… so essentially, there are more questions raised than answers at the
point.”
There have also been
questions on how the DOE has been altering the definition of a ‘gas hub’, with
it merely referring to a trans-shipment point or one liquefied natural gas
(LNG) facility project.
In the true sense of
the gas market today, that may not qualify as such, because a “gas hub” entails
having a market wherein buyers and sellers could have a transaction center or
contractual point for the commodity. The main features of a gas hub would be an
operator and traders.
Energy Secretary
Alfonso G. Cusi has grand plans of positioning the Philippines as “gas hub” in
the Asia Pacific region, but his department officials have yet to go through
the very elementary step of understanding what really constitute a gas hub and
how it operates.
More than clearing the
regulatory framework pathway, the DoE has also set out the “intervening factors”
why the country would need to re-embrace gas in its energy mix.
Energy Secretary
Alfonso G. Cusi, in particular, noted that his department is “already preparing
the necessary policies as we approach the depletion of indigenous natural gas
supply from Malampaya by 2024.”
The energy chief added
“by diversifying our energy mix through LNG, we are ensuring a secure and
stable supply of energy,” stressing that “this is a priority.”
While devoid yet of
substance on policy directions though, primarily those that would deal with gas
pricing, off-take agreements and setting the place of gas in the energy mix and
power supply deals at the level of the gas-generated electricity, the DOE can
just state for now the reasons why it started opting for gas as part of the
technology options for the energy sector.
The department cited
the potential of gas serving the “mid-merit” capacity needs of the power system
or the technology that can be cycled in case of power-supply demand
fluctuations in the grid; the allure of gas as a coupling technology to
intermittent renewable energy (RE) sources; its prospective use as replacement
to diesel-fired power facilities; and the expected gas market expansion into
non-power applications.
For many of the
stakeholders that attended the public consultation though, they wanted to be
apprised more of the intended policy directions of the government; and not
reiterate the ‘mediating variables’ already well known to them.
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