Friday, November 10, 2017

PNOC opts for unsolicited proposals for LNG facilities



Published November 8, 2017, 10:01 PM By Myrna M. Velasco

State-run Philippine National Oil Company (PNOC) will no longer pursue the government-to-government (GTG) deal on its planned $2.0 billion worth of investments on liquefied natural gas (LNG) facilities, instead, it is opting now for the submission of unsolicited proposals from interested investors.
According to PNOC President Reuben S. Lista, the mandate he has gotten from the company’s board will be to secure a viable unsolicited proposal at least until December 31 this year, but if that will not turn out successful, the state-run company will pursue competitive bidding next year on its prospective partner.
He explained that the country’s hurdle on government-to-government deal is the lack of bilateral discussions yet on such – at least between and among the relevant ministries of the countries of the firms showing interest on the propounded LNG investments.
So far, interests had been shown by prospective LNG investors from China, Japan, Russia, Singapore, Spain and Middle East firms.
Lista further qualified that not having discussions on this sphere at least on the “ministry level” of these countries may eventually turn out a drag to the targeted timeline of the LNG investments.
“If we will have government-to-government investment arrangement and I get my go-signal for that next year, we may only start negotiations by 2019, so we would be incurring delays in the project,” he stressed.
The easier track the company could work on for now, he said, would be inviting parties with unsolicited proposals or a bidding process by next year.
He noted that the company is working on a timeline set by Energy Secretary Alfonso G. Cusi, entailing then that the LNG import terminal must already be on commercial stream by year 2020.
“If we will go for G-to-G, it will take long, so it’s all the more that we cannot beat the 2020 target. In fact, I already asked the Secretary (Cusi) to give me leverage until 2021,” he said.
Lista added the state-run firm will be taking the LNG investments plunge, not necessarily to compete with private sector players, but chiefly on the bid to help government on its gas market reset.
“We are not competing with the private sector, but this will not stop PNOC to continue in order to expedite investments in the sector and to ensure that our banked gas will not be stranded,” he stressed.

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