DOE to start construction of LNG hub by 2019

Danessa Rivera (The Philippine Star) - April 30, 2018 - 12:00am

https://www.philstar.com/business/2018/04/30/1810637/doe-start-construction-lng-hub-2019

MANILA, Philippines — The Department of Energy (DOE) is now targeting to start construction of the country’s liquefied natural gas (LNG) hub not beyond the middle of 2019 as more interested parties express intent to participate in the development of the massive project, a ranking government official said.

The agency is still accepting letters of intent (LOI) from companies interested to build the LNG terminal under the Philippine Downstream Natural Gas Regulation (PDNGR), Energy Undersecretary Donato Marcos said.

The PDNGR details the rules and regulations governing the downstream natural gas industry to develop a market and gain energy security and sustainability.

There are 10 companies which have submitted their LOI, profiles, and business models and more investors are still approaching the DOE for the project, Marcos said.

Some of the interested parties are local firm Cleanway and UK-based Resiro, Japanese firm Tokyo Gas, Lopez-led First Gen Corp., China National Offshore Oil Co. (CNOOC), Philippine National Oil Co. (PNOC), and Carmine Energy Pte. Ltd. with Golar Energy.

With this, Marcos said the DOE is now looking at groundbreaking to happen sometime in the fourth quarter until the first half of 2019.

“We need to realize (the project) in the fourth quarter, but of course we’re also looking at early quarter or first semester of next year,” he said.

“What is important is they achieve financial closing. Once they get the financial closing, they will complete their requirements and we can issue the notice to proceed, after which, (we can issue) the permit to construct, expand, rehab and maintain, and then after that is the permit to operate and maintain,” he said.

During the 35th ASEAN Ministers on Energy Meeting (AMEM) last year, Energy Secretary Alfonso Cusi said the liquefied natural gas (LNG) hub in Batangas was expected to start construction in 2018.

Cusi said the project it is targeted to be online by 2020 to safeguard against the anticipated depletion of the Malampaya gas facility in 2024, which supports over 3,000 megawatts (MW) of gas-fired power plants.

The LNG integrated terminal is also targeted to become an LNG hub for Asia, complementing those in Japan and Singapore.

Meanwhile, the Management Association of the Philippines (MAP)—one of the premiere business organizations in the Philippines—is pushing for clarity in the upstream and downstream natural gas industry of the country which could leave 3,200 MW of gas-fired power plants stranded.

The business group believes that “there is not enough clarity on how the Philippines will manage the decline of the Malampaya natural gas reservoir and in new exploration and production gas finds,” MAP committee on energy vice chair Ernesto Pantangco said.