April 13, 2018 | 12:07 am By Victor V. Saulon, Sub-Editor
PHINMA Petroleum and Geothermal,
Inc. (PPG) is developing a liquefied natural gas (LNG) facility with a
120-megawatt (MW) power plant in Cebu, which company officials expect to be
completed by 2022 to 2023.
“We are developing an LNG-to-power
project in Argao, Cebu,” Raymundo A. Reyes, Jr., PPG executive vice-president
and chief operating officer, told stockholders during the company’s annual
meeting on Thursday. Argao is about 70 kilometers southwest of Cebu City.
“There is a low level of activity in
the upstream [sector]. Your company decided to expand to the midstream sector
of the business,” he added.
Mr. Reyes said in November 2017, the
company signed a joint development agreement with three companies, which will
cover the deployment of the floating storage and regasification unit as well as
the 120-MW power plant and associated facilities.
“To date, high-level engineering
design and solutions have already been completed for the jetty, the floating
power plant, and the floating LNG storage and regas unit,” he said. “And we
expect by the middle of this year, we would have the feasibility level cost
available to us.”
He said LNG supply and shipping
solutions have already been identified and selected, and an LNG market forecast
has also been completed. The company is in discussion for an agreement on LNG
supply and delivery, he added.
Mr. Reyes told reporters that the
feasibility study, once completed, would determine the economic viability of
the project, and whether it is a “go or no-go.”
“This will be a 20 to 25-year
project so we have to be conscious of the behavior of LNG price in the market,”
he said.
Francisco L. Viray, PPG president
and chief executive officer, said the capacity of the power plant was
determined based on the region’s demand.
“It’s the size that can be absorbed
in Visayas. No more than 10% kasi dapat ang size mo sa grid.
Visayas is about 2,000 MW, so no more than 200 MW,” he said, adding that the
size is expandable because the facility is modular.
“And of course it is contingent on a
power supply agreement (PSA). Hindi naman matutuloy ’yon kung walang
PSA. That’s very critical,” the official added.
Mr. Viray said the capacity of the
storage facility would be determined after the outcome of the feasibility
study.
“The study here will tell us whether
gas will be competitive under a technology-neutral energy mix, or not. Once it
is competitive, I think it will be competitive in other sites, so it’s just a
matter of timing later on,” he said.
The company had earlier dropped
plans to build the facility in Sual, Pangasinan because of the excess capacity
in the Luzon grid, Mr. Viray said.
“I don’t think we need that capacity
[in Luzon] before 2025. So we shifted it dito sa Visayas,” he said.
Mr. Viray declined to disclose the
expected cost of the project, saying figures at this time were still “very
rough” estimates. He also did not name the development partners because of a
non-disclosure agreement.
Mr. Reyes said the biggest cost of
component of the project would be the combined cycle gas turbine for the power
plant.
PPG parent Phinma Energy Corp. is
among the local companies that have undertaken initial plans to develop an LNG
facility. The venture is in part prompted by the expected depletion of the
country’s lone source of domestic natural gas, the Malampaya offshore field
west of Palawan, which is expected to run out starting in 2024.
Natural gas, said to be the cleanest
fossil fuel, is usually transported through a pipeline, but if the deposit is
large and the market is overseas, the gas may be liquefied into LNG and moved
via specialized tankers.
The other day, Phinma Energy said it
is entering the downstream oil sector, initially catering to the fuel
requirement of its own diesel plants, through subsidiary One Subic Oil
Distribution Corp.
No comments:
Post a Comment