Iris
Gonzales (The Philippine Star) - June 28,
2018 - 12:00am
The race to build the first LNG
facility in the Philippines is on and President Duterte’s favorite tycoon from
Davao has joined the fray. It’s understandable that private sector proponents
are scrambling to bring LNG onto the country. It could mean money, and being
the businessmen that they are, it’s always about money.
I’m confused, however, why the
Department of Energy has to look beyond our shores to get things done when here
at home, there’s already a pending proposal that is ready to move, not to
mention a number of other proposals on the table.
Last week in Tokyo, Energy Secretary
Alfonso Cusi joined the high-level meetings on infrastructure and economic
cooperation between Japan and the Philippines.
He was there to entice Japanese
investors to place their bets on the government’s plan to have liquefied natural
gas in the Philippines as Luzon’s main source of natural gas — the Malampaya
natural gas — is nearing depletion.
“Energy Secretary Cusi will focus on
encouraging natural gas companies in Japan to invest in the Philippines’ LNG
Hub Terminal project in anticipation of the Malampaya gas field’s depletion by
2022,” the DOE said last week.
But this might be a waste of time
and energy. There is already a pending proposal which already includes
Japanese investors. And the good secretary knows it.
Gregorio Araneta Inc.
(GAI), the company of businessman Gregorio “Greggy” Araneta III has long
proposed to build a $2 billion LNG facility in Bataan with at least
600 megawatts, a plan, which already has the backing of Japanese investors.
Cusi had said in 2016 he is happy
with GAI’s proposal which is in partnership with the MVP Group and Japanese
giants Mitsui and Osaka Gas.
The ambitious Energy
City LNG project, to be located in the Bataan industrial park of
PNOC-Alternative Fuels Corp. (AFC), was submitted for approval as far back
as 2012.
When President Duterte was
elected into office, the group presented the plan to Cusi on July 29, 2016,
right in his boardroom, to transition the project into the new
administration.
Cusi was very happy to learn of the
proposal, Araneta told me before. Who wouldn’t? Mitsui and Osaka Gas are large
corporations with the ability to develop the project at no cost to the
Philippine government.
Even other economic managers,
learning about the project, got excited.
But two years later, nothing
has happened. It seems the DOE and PNOC have effectively put GAI’s proposal in
the trash bin because the parties could not agree on the lease rate.
Now, the DOE is seeking other
proposals for an LNG facility to be put up in Batangas instead of Bataan.
LNG is natural gas which has
been converted into liquid for ease of storage or transport.
However, industry sources
said, for an LNG terminal, the more ideal site would be Bataan.
The primary advantage of Bataan over
Batangas as a site is the Manila Bay, which makes docking safer especially
during the typhoon season as opposed to ports that face open seas.
Against this backdrop, it
seems Cusi wants to start from zero and look for other Japanese investors.
What happens next is still anybody’s
guess.
In the meantime, many other
players are joining the LNG bandwagon.
Dennis
Uy’s LNG bid
Dennis Uy, for instance, said he
wants to be the first LNG proponent in the country. He has the support of China
and he is moving fast, already conducting a feasibility study to determine the
location and viability of the project.
His Phoenix Petroleum has
partnered with the CNOOC Group, China’s largest offshore oil and gas company
for the planned LNG terminal and power plant in the Philippines.
With China’s backing and his warm
relations with Malacañang, Dennis might just get his wish.
Duterte’s
most loved tycoon and most unloved tycoon
Speaking of Dennis Uy, many are
wondering what’s the real reason behind his newfound friendship between
Duterte’s most loved tycoon and most unloved tycoon, Roberto V. “RVO” Ongpin.
Dennis is now part of RVO’s
Alphaland and Atok as director, and he is also investing in ISM Communications,
a known Ongpin company but now chaired by his nephew Eric Recto.
The relationship between
Dennis and RVO seems to have suddenly warmed.
But Dennis laughed off the
observation.
“It was never cold,” he said.
He said the issues, if any,
are really between his long time friend from Davao and his newfound friend.
And he also didn’t need
Duterte’s blessings to join RVO’s companies, Dennis said.
Still, the newfound friendship
has piqued the curiosity of some observers.
Some think it might be a third
telco play.
How so? The newfound “friendship,”
they said, meets the formula for a third telco player: 1) Must have the money.
2) Must be close to the administration, and 3) Must have telco experience like
RVO who was behind ISM Communications and Eastern Telecommunications
Philippines Inc.
We’ll have to wait and see.
But I’m sure of one thing. RVO, being the brilliant and quintessential
dealmaker and businessman that he is, knows what he’s doing.
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