Published
By Myrna M. Velasco
Korea Electric Power
Corp. (KEPCO) has submitted an unsolicited proposal for the $2-billion
liquefied natural gas (LNG) facilities that state-run Philippine National Oil
Co. (PNOC) wants to implement.
Sources at the Korean
company affirmed that they actually “forwarded an offer” to the government, but
qualified that “everything is still very preliminary at this stage.”
KEPCO is an experienced
player in the Philippine gas market, as it was the developer as well as
operator of the 1,200-megawatt Ilijan natural gas-fired power project.
That facility’s
contract will already lapse in 2022 and may already be turned over to its
Independent Power Producer Administrator.
An energy official
first hinted of the KEPCO submission – essentially a response to the mandate
given to PNOC by Energy Secretary Alfonso G. Cusi for the state-run firm to
corner unsolicited proposals up to December 31 this year on the planned LNG
projects.
If a viable unsolicited
bid will not turn up by yearend, PNOC’s plan is to hold a formal bidding next
year for it to corner a private sector partner.
The mode it has been
eyeing would either be a joint venture or build-operate-transfer (BOT) scheme.
Prospective bidders are
expected to include technical, financial and legal proposals in their tenders.
The prospective
investors must also submit a feasibility study or front-end engineering design
(FEED) of the planned LNG investments, which will then serve as the
government’s basis in choosing a partner that will match its preferred design
for the LNG projects.
PNOC President Reuben
S. Lista is quite forthright about their condition to integrate the
company-purchased Ilijan banked gas in the partnership deal.
The government-run
company’s plan is to equitize the “banked gas,” so PNOC could in turn become a
strategic equity holder and partner in the gas ventures.
The currently appraised
value of the banked gas had been placed at R35-R40 billion (or $700 to $800
million), but that changes depending on the swing of global gas prices at the
signing of the tie-up deal.
If Cusi’s timeline
would have to be followed, the groundbreaking rites for the proposed LNG
investments shall be next year, and the LNG import facility shall be set on
stream at the earliest in year 2020.
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