Phinma Energy not giving up on LNG project in Pangasinan

Posted on April 12, 2017
http://www.bworldonline.com/content.php?section=Corporate&title=phinma-energy-not-giving-up-on-lng-project-in-pangasinan&id=143695

PHINMA ENERGY Corp. has not abandoned its plan to build a receiving terminal for imported liquefied natural gas (LNG) in Sual, Pangasinan with a gas-fired power plant component, a company official said.

“It’s still under study,” Raymundo A. Reyes, Jr., Phinma Energy senior vice-president, told reporters at the sidelines of the company’s annual stockholders meeting on Monday in Makati City.

The feasibility study, which the company began a year ago, is looking into the viability of putting up the facilities given existing market conditions.

The project is capital intensive and “very risky if you don’t have a sure market,” he added.

Mr. Reyes said the project would be under Phinma Energy subsidiary Trans-Asia Petroleum Corp., where he is also executive vice-president and chief operating officer.

For now, he said Phinma Energy is studying the construction of a 300-megawatt (MW) gas-fired power plant and an import terminal with a capacity of 400,000 tons of LNG per annum.

Should the company come up with a final investment decision now, Mr. Reyes said the earliest date that it can complete the project would be in 2020, or two years ahead of the expected depletion of the offshore Malampaya gas find west of Palawan.

“You also have to consider that (power plant) into the equation [because] you can import [but] if you don’t have any anchor load ’di mo rin mabebenta ’yung LNG mo (you won’t be able to sell your LNG),” he said.

He said the company was planning to build the project on its own or as the majority owner in a partnership. But for the terminal, it will take on partners and is even willing to take a minority interest.

Mr. Reyes said foreign entities have approached the company on a possible joint venture, which could include more than one entity.

The Phinma Energy official described the current market for gas as less competitive than coal. He noted the country has an existing oversupply of baseload power from coal-fired plants, leaving developers to compete mostly in developing mid-merit capacity.

The Energy department has been saying that the Philippines’ power system requires 70% baseload power, which is provided by plants running on coal, natural gas and geothermal power on a 24-hour basis.

Around 20% is needed from mid-merit plants, which are mostly running on natural gas. Only 10% is required from peaking plants -- largely oil-based facilities and renewable energy projects whose output peaks when demand surges to its highest level.