Published
By LORETO D. CABANES
BARCELONA, Spain – In
the midst of shifting business paradigms, global policymakers and investors are
in search for new financing models that will enable gas to thrive versus
cheaper cost fuel options in energy markets.
As gas markets evolve,
according to Melanie Lovatt, finance advisor for Poten & Partners, a global
energy and ship brokerage firm, the “ongoing shift to shorter-term LNG
contracts and more commoditized market” will certainly have its impact on the
future of the sector.
This is the reason, she
said, that intensified discussions are being held with array of stakeholders –
from project sponsors to customers and project funders – to re-assess how these
developments would eventually shape the market.
The concerns being
raised to the table, she said, revolve around the scale of project debts to be
raised as well as the project financing structures that shall be acceptable to
lenders.
In addition, Siddhartha
Shrivastava, head of energy and natural resources of Asia’s Sumitomo Mitsui
Banking Corporation, noted that while LNG financing “has traditionally been
underpinned by a combination of: Long-term contracts; full volume off-take
(capacity purchase); and investment-grade LNG buyers… the commercial structures
for the new LNG buyers are now moving away from these elements.”
It is a well-advised
direction for LNG stakeholders then to examine if the new LNG financing
structures could adapt “to the new commercial realities,” and if the risks can
be viably re-allocated “to achieve bankable LNG financing.”
Exploring the right
formula on LNG financing is the same dilemma that the Philippines currently has
– especially since this is a market that is still transforming from the
traditional oil price-indexed to one that will already be adjusting to wider
wiggle room of market flexibilities.
And for the
end-consumers, the major concern of many LNG project developers as well as
those that will be putting up the off-taker power generating facilities will be
the cost impact that gas fuel utilization will eventually have in the electric
bills – taking into account that Filipinos are very cost-sensitive in what they
see in their monthly billings.
It is highly essential
for the Philippines to decide soon on the future of its gas industry, but
policymakers are still navigating the next regulatory and policy regimes that
shall govern the country’s gas sector post-Malampaya.
Even price indexation
is a dilemma that industry players and the government will need to sort out at
the soonest possible time.
No comments:
Post a Comment