By
Lenie Lectura - October 1, 2017
THE Manila Electric Co.
(Meralco) has told state-firm Philippine National Oil Co. (PNOC) that it is
interested to take part in the country’s first liquefied natural gas (LNG)
project.
“We indicated to PNOC
our interest to any development in LNG,” Meralco President Oscar Reyes said.
The PNOC was
tasked by the Department of Energy (DOE) to develop an integrated LNG hub
with storage, liquefaction and regassification and distribution facility, as
well as a reserve initial power-plant capacity of 200 megawatts (MW).
“We are looking at it.
That’s clearly an option,” Reyes added. “We have expressed willingness to be
part of either pipeline gas or LNG.”
If and when Meralco
pushes through with its plan to venture into LNG, Reyes said the company would
have to pursue this together with “credible partners”.
“Our approach is
largely to partner, rather you do it solely. We have to partner with a
strategic partner because that validates your decision,” Reyes
added. “Somebody else looking and saying yes to it adds credibility to the
project that we are pursuing.”
Meralco was looking at
venturing into LNG way back in 2015. It was then exploring a possible
partnership with Osaka Gas Co. Ltd. of Japan. Both were separately engaged in
the conduct of a feasibility study. No development was reported since then.
Reyes said Meralco,
which has a power-generation arm, never shelved its interest in LNG.
“We continue to look at
it. If in the future gas prices are competitive, then it’s back in the agenda.
We will always be ready to provide the market for LNG, along with coal,” Reyes
said. “In terms of offtake, we have to look what’s going to be the impact of
overall generation.”
The DOE has scheduled
the groundbreaking for the country’s first LNG hub in 2018.
Energy Secretary
Alfonso G. Cusi said the government is aiming to turn the Philippines into a
hub for LNG as natural gas from the Malampaya gas field in Palawan is expected
to be depleted in less than a decade. Currently, around 3,500 MW of power-plant
capacity is dependent on Malampaya, the country’s sole natural-gas source.
“We’ve started with the
rollout of the Batangas LNG terminal by 2020 to safeguard against
the anticipated depletion of Malampaya in 2024,” Cusi said.
LNG is natural gas that
has been converted into a liquid state for easier storage and transportation.
Upon reaching its destination, LNG is regassified so it can be distributed
through pipelines as natural gas.
Cusi added the DOE
would issue a regulatory framework on LNG soon. A public consultation is also
scheduled on October 10.
PNOC President Reuben
Lista said the number of interested firms wanting to partner with the state
firm to pursue the ambitious LNG project has increased to 68 firms.
The proposed LNG
project is still under review. The PNOC could tap the International Finance
Corp., a member of the World Bank Group, for the conduct of a feasibility
study.
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