LNG storage backers tout Lucio Tan, JG Summit companies as gas users

December 22, 2019 | 11:51 pm

https://www.bworldonline.com/lng-storage-backers-tout-lucio-tan-jg-summit-companies-as-gas-users/

A CONSORTIUM of potential users of liquefied natural gas (LNG) fronted by Lucio C. Tan’s conglomerate is asking the Department of Energy (DoE) to issue a notice to proceed with their proposed floating LNG storage facility.

“Meron na. Naga-apply sila… nasa level ko na (There is an application. They have applied, it has reached me for approval),” Energy Undersecretary Donato D. Marcos told reporters last week when asked whether other entities had applied to build a facility to receive imported LNG.

In its application, the consortium goes under the name “Batangas Clean Energy” and proposes to distribute LNG to industrial users from Lucio Tan-controlled companies as well as those belonging to JG Summit Holdings, Inc. from a floating storage regasification unit (FSRU).

“Ang captive market (Its captive markets are) JG Summit, Tanduay, Eton, Asia Brewery,” according to Mr. Marcos, the DoE official who recommends LNG-related project proposals for approval by the Energy Secretary.

JG Summit is controlled by the Gokongwei family and operates companies in the food, agro-industry and commodities, real estate and hotel, air transportation, banking, and petrochemicals industries. It also has investments in telecommunications and power generation and distribution.

Tanduay Distillers, Inc. is the parent firm of Absolut Distillers, Inc., which in 2018 laid down its P1.3-billion expansion plan for the next two to three years covering investments in at least 10-megawatts of renewable energy and a capacity increase for bioethanol production.

Asia Brewery, Inc. and Eton Properties Philippines, Inc. are subsidiaries of LT Group, Inc., Mr. Tan’s listed holding company with investments in diversified industries, including beverages, tobacco, property development, and banking businesses.

“It’s an FSRU,” Mr. Marcos said about the proposed facility.

The floating facility will allow backers to receive LNG shipments ahead of the expiration of the Malampaya gas contracts in 2024.

The offshore Palawan gas discovery is the country’s only find so far. The consortium that holds the service contract had applied for a contract extension, which the DoE has yet to act on.

First Gen Corp. has DoE approval to put up an FSRU. The Lopez-led rival project is considering an LNG storage ship with an onboard regasification plant capable of converting the liquefied fuel back into its gaseous state. The gas can then be supplied directly to some or all of the company’s existing power plants.

Mr. Marcos said he was not familiar with the members of the consortium led by Mr. Tan.

“Ang kanilang (Their) business model, or captive market, to assure viability (are) Tanduay, Asia Brewery, Eton, JG Summit and others,” he said.

“Sinasama din nila ‘yung Pilipinas Shell refinery, sabi ko ‘di mo puwede angkinin ‘yan kasi at the moment, naka-contract ‘yan sa banked gas ng Malampaya at PNOC (They were including Pilipinas Shell Petroleum Corp., but I told them they can’t assume that because at the moment, it is under contract to take up the banked gas of Malampaya and Philippine National Oil Co.),” he said.

Mr. Marcos said the DoE has been going over the consortium application for about two months. He did not say when the agency could complete its evaluation nor the expected issue date of the notice to proceed. — Victor V. Saulon