Tanglawan plans to put up LNG terminal in Batangas

By Lenie Lectura - January 24, 2019

https://businessmirror.com.ph/2019/01/24/tanglawan-plans-to-put-up-lng-terminal-in-batangas/

TANGLAWAN Philippines LNG Inc., a joint venture between Philippine fuel retailer Phoenix Petroleum and China’s largest LNG importer and terminal operator CNOOC Gas and Power Group Co. Ltd., is seen putting up its liquefied natural gas (LNG) terminal in Anilao, Batangas.

Tanglawan was earlier considering two sites in Batangas. One used to be the refinery location of Chevron (Caltex) in San Pascual, Batangas, and the other is a former project site of AG&P in Anilao, Batangas.

Energy Undersecretary Donato D. Marcos said Tanglawan and AG&P have already reached an agreement.

“Tanglawan already signed a conditional sale with AG&P. It was submitted to us,” Marcos said on Wednesday.

The Department of Energy official said no similar agreement between Tanglawan and Chevron was submitted to the DOE.

“The National Development Co. did not submit yet. Actually, it’s AG&P for the site, but Tanglawan is also looking at NDC,” Marcos said.

State-owned NDC owns the land that used to house Chevron’s refinery.

When sought for comment on Wednesday, Phoenix officials did not reply to confirm the conditional sale agreement between Tanglawan and AG&P.

Tanglawan was earlier issued a Notice to Proceed (NTP) permit from the DOE, signaling the start of the process to put up its capital-intensive LNG project.

Marcos said Tanglawan has six months from the issuance of an NTP to obtain other permits such as environmental compliance certificate from the Department of Environmental and Natural Resources, National Commission on Indigenous People clearance, and a local government unit endorsement, among others.

Financial closure is also expected to take place within the six-month period. Upon compliance, Tanglawan can proceed to construct the project.

“In six months, the NTP states we should see seriousness on their part to put up the power plant,” Marcos said.

Tanglawan plans to break ground by 2019 for the regasification and receiving terminal with a capacity of 2.2 metric tons per annum, with commercial operations targeted to start by 2023.

The LNG facility will help support the demand for a clean, low-cost and environment-friendly energy source in Luzon and contribute to the sustainable development of the Philippine economy.

The integrated long-term project plan also aims to develop a gas-fired power-generation facility with up to 2,000 megawatts (MW) of installed capacity.

Marcos said Tanglawan’s LNG project will initially consist of a 1,000-MW gas plant. 

“That’s the initial. But the design is for third-party access, meaning they will target the commercial, industrial and ultimately the household users.  We don’t issue own-use permit. We always issue third-party access permit. They have to look for off-takers but, at least, one of their off-takers could be Meralco. They have to coordinate. Otherwise, the market or the commercial viability of the project will not push through,” Marcos said.

Aside from Tanglawan, two more firms filed their respective applications for a notice to proceed with the DOE.

US floating LNG player Excelerate Energy filed early this month an application for a permit to proceed with its plan to construct a proposed floating LNG terminal.

The pioneer and market leader in innovative floating LNG solutions is planning to construct the facility in Batangas.

Aside from Excelerate, the DOE has received a similar application from Lopez-led First Gen Corp.

First Gen’s application stated it will construct an LNG terminal in Batangas City with its partner Tokyo Gas Co. Ltd.

Tokyo Gas will take a 20-percent participating interest in the First Gen LNG project and provide support in development work to achieve a final investment decision. Then the parties will enter into a definitive agreement to proceed with the construction of the FGen Batangas LNG terminal project.

Marcos said their NTP applications are still under evaluation. The agency will determine if there is overlapping of captive market among aspiring LNG players.

“If the market they will declare is not an overlap to the market of the other one if First Gen will be issued a similar permit,” he said. “The evaluation is not yet finished, but Tanglawan is not saying that First Gen is its captive market.”