DOE sets two-tier feasibility study on natural gas industry

by Myrna Velasco May 17, 2016 (updated)
http://www.mb.com.ph/doe-sets-two-tier-feasibility-study-on-natural-gas-industry/

The Department of Energy (DOE) will fortify previous studies on the expanding natural gas industry – but this time, it is eyeing a two-tiered feasibility study approach so it can have a more in-depth analysis of the needs of the market.

DOE Director Jesus Tamang said one study will tackle the Batangas-Manila (BatMan) pipeline project; while the other will look at market prospects for liquefied natural gas (LNG) in the country.

Nevertheless, given the close of the Aquino regime by June 30 this year, these targeted studies may already move headway in the next administration.

Tamang noted there are key parameters that have to be examined more comprehensively on the proposed BatMan pipeline – primarily the route it is going to traverse onward to prospective gas markets in Manila.

The energy department earlier thumbed down the outcome of a third party study consigned by the Public-Private Partnership (PPP) Center, noting that the project cost and the pipeline’s targeted pathway had not been as viable.

Energy Secretary Zenaida Y. Monsada thus directed state-run Philippine National Oil Company (PNOC) and the DOE’s planning bureau to re-do the study and explore a route that would be more feasible when it comes to the market that the pipeline will eventually cater to.

And given varying proposals on the setting up of proposed LNG terminals, Tamang asserted that there is now a compelling need for them to devote a separate study on this.

Some players in the industry are proposing a purely private sector-led LNG terminal; while others want the government to set up the terminal and a private sector entity will just do the aggregation of the market’s gas demand.

The specified two projects will be very crucial in underpinning the future of the Philippine gas industry – not only for power sector applications but for expanded markets like industries and the transport sector.

For the pipeline in particular, it shall service an anchor power plant that is eyed to be sited within or close to Metro Manila.

The country’s next biggest dilemma will be production decline at the Malampaya gas field, hence, the LNG terminals are seen as urgently needed investments to support planned gas importation.

The LNG handling facility will not just serve the needs of the existing power plants – but more importantly, the capacity additions that are already in the blueprint of investors.