DoE studying common LNG infrastructure worth P100B

Posted on June 08, 2017
http://www.bworldonline.com/content.php?section=Economy&title=doe-studying-common-lng-infrastructure-worth-p100b&id=146397

ENERGY Secretary Alfonso G. Cusi said his department is looking at the construction of a common liquefied natural gas (LNG) receiving and distribution infrastructure, which he said could help make the country an “LNG hub” for Southeast Asia.

“In the short term, we seek to build a common LNG receiving and distribution infrastructure as part of the future ‘clean energy city,’” Mr. Cusi told participants of General Electric’s forum “Powering the Philippines” at New World Hotel in Makati City on Wednesday.

Mr. Cusi said the facility would cost around P100 billion and is targeted for completion by 2020, which should give the country enough lead time and safeguard gas supply ahead of the anticipated depletion of the Malampaya gas field in 2024.

He said the facility would have an initial 200-megawatt (MW) power plant, storage facilities and liqeufaction and regasification units. The plant’s output is aimed to serve the country’s economic zones, he added.

Mr. Cusi said his department has yet to determine the exact scope of the facility, but he said the project was “moving,” and had attracted interest from around 50 entities. A source at the Philippine National Oil Co., which is the implementing agency and a stakeholder in the project, validated his number.

“The magnitude of that is dependent on how the feasibility study being made, and how the coordination with other countries would progress,” he told reporters in a press conference after the forum.

Asked whether the department would offer perks to encourage investments in LNG, Mr. Cusi said the “Philippines is a poor country that can’t afford to give incentives.”

He said power generation companies were able to build gas-fired power plants without incentives, thus perks for now are not necessary.

“Maybe later when we have the luxury of choice,” he said.

Mr. Cusi said LNG infrastructure is one of many strategies of the Department of Energy to prepare for an expected power demand of 43,765 MW by 2040 under the government’s power mix by that year of sourcing 25,265 MW from baseload plants, 14,500 MW from mid-merit and 4,000 MW from peaking power sources.

“We missed being the hub for aviation, we missed being the hub for maritime, maybe we can be the hub for LNG in Southeast Asia,” Mr. Cusi said.

Mr. Cusi also said that the department wants to include in its 2018 budget the hiring of a third-party entity that will audit the country’s existing power plants. He said he assumed office last year, he asked power plants to be audited through an engineering association.

“We want to give this (audit) to a third party. We want to include that in our budget for 2018 so that we can have it auctioned.”

He said the audit is part of the department’s initiative to retrofit existing facilities by making them adopt new technology. Because of the age of these plants it had become costly for consumers who pay for expensive power from generators that deliver limited output. -- Victor V. Saulon