LNG proponent ties up with Chinese firm

Published November 10, 2018, 10:00 PM By Myrna M. Velasco
https://business.mb.com.ph/2018/11/10/lng-proponent-ties-up-with-chinese-firm/

A prospective partner of state-run Philippine National Oil Company (PNOC) has tied up with a Chinese firm on its bid to put up the country’s liquefied natural gas (LNG) import facility.

Dubai-headquartered Lloyds Energy announced that it has gotten on its wing China Kaicheng Energy Ltd. for the development and construction of an integrated LNG hub.

Lloyds Energy is among the firms that submitted letter of interest (LOI) to PNOC on the latter’s search for a strategic partner to build the country’s LNG import terminal with a hub component – which is basically the direction that the Department of Energy (DOE) has set for the winning party on that propounded gas investment terrain.

PNOC has been among those shortlisted by the DOE for the LNG hub venture that the country will be engaging itself into – it being the solution to its gas market reset following production decline at the country’s Malampaya gas field.

Energy Secretary Alfonso G. Cusi indicated that they will select the LNG facility investor by the end of this month – or at least prior to the close of this year.

Apart from PNOC, in the government’s shortlist are First Gen Corporation of the Lopez group and the joint venture of Davao businessman Dennis Uy and China National Offshore Oil Corpration.

For the PNOC-proposed project, it has been eyeing a prospective site in Batangas and its targeted technology shall be anchored on floating storage regasification unit (FSRU) with initial capacity of 3.0 million tons per annum.

Lloyds Energy said it purchased the “instructions to private sector participants-eligibility documents” and will be attending the November 16 pre-eligibility conference scheduled by PNOC on its selection of a strategic partner.

Based on the numbers crunched by PNOC and its transaction advisor Asian Development Bank (ADB), the scale of investment that PNOC will be shelling out for the LNG venture will range from US$600 million to USS1.4 billion – as it sets an option to build an onshore LNG import facility in the long term.

Beyond the import terminal, the bigger scale plan of PNOC will be to invest eventually in gas-fired plants to serve as anchor load of the LNG import receiving facility. Preliminary targets had been to serve the needs of industrial zones.

The state-run company also originally planned to tie in its ‘banked gas’ in the joint venture arrangement, but the plan had already been ditched and PNOC just opted to sell the gas commodity separately.