December 6, 2017
THE Department of Energy
(DoE) on Tuesday outlined its policy for the downstream natural gas
industry, a strategy for making the Philippines a regional hub for the fossil
fuel, which includes plans for a $2-billion liquefied natural gas (LNG) terminal.
“That would guide everybody
including PNOC (Philippine National Oil Co.)… to operate an LNG terminal,”
DoE Secretary Alfonso G. Cusi told reporters at the ceremonial signing of
Department Circular 2017-11-0012 or the “Rules and Regulations Governing the
Philippine Downstream Natural Gas Industry.”
He said the circular is needed ahead
of the construction next year of the integrated LNG facility. Many companies
that are keen on participating in the project have been awaiting the issuance
of the rules before firming up their plans.
“It takes two and a half years to
make it [LNG terminal] operational from the time the project starts,” he said.
He said the project should be
completed before the expected depletion of the Malampaya offshore gas find near
Palawan island in 2024.
“But we will not wait for that. We
need that in place in three years’ time,” he said.
He said local and foreign project
proponents have approached PNOC to partner with the DoE’s commercial arm in the
project.
Separately, DoE Undersecretary
Donato D. Marcos said under the rules, PNOC or its unit PNOC Exploration Corp.
(PNOC-EC) may acquire at least a 10% stake in the LNG project, which will house
a storage, regasification and a power plant.
He placed the facility’s cost at
around $2 billion and its eventual capacity at five million metric ton per
annum.
“We’ve finished. We have complied
with all the policy regulations, it’s up to them (PNOC) to find a partner,” Mr.
Cusi said.
But he said foreign entities that
submit proposals directly to the DoE will still be referred to PNOC or PNOC-EC
for a possible partnership.
“They are choosing a partner to move
their project forward. So that is complying with the policy that we have
crafted,” he said, adding that three proposals from foreign groups are being
evaluated by PNOC.
Mr. Marcos said the LNG terminal’s
power plant component can be 100% owned by foreigners, although the public
utility component is subject to the constitutional limitation of 40% foreign
ownership.
“That’s why the permit is for the
third-party access,” Mr. Marcos said.
Under the rules, excess capacity of
the LNG terminal, transmission system, distribution system and other services
offered by the operator should be made available on a transparent and non-discriminatory
basis to third-party users. — Victor V. Saulon
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