MPIC, Meralco mull LNG import facility investment

Published July 31, 2018, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2018/07/31/mpic-meralco-mull-lng-import-facility-investment/

Two firms under the stewardship of business tycoon Manuel V. Pangilinan – the Metro Pacific Investment Corporation (MPIC) and Manila Electric Company (Meralco) – are firming up studies on planned investment plunge into setting up a liquefied natural gas (LNG) import facility.

Pangilinan, who is chairman of both companies, disclosed to reporters that studies by its foreign consultant-firm tackle prospects of putting up either an onshore LNG import facility or floating regassification and storage unit (FSRU).

“We’re studying that (LNG import facility investment). What we have to be aware of is to build the gas terminal,” he said; adding that it had been Meralco and MPIC involved in this investment planning.

The investment’s feasibility study phase, he said, will likely be completed early part of next year – but specific timeline on advancing the project shall be something that the company has to decide further later on.

Pangilinan noted that the conventional assumption on the need for LNG import facility is for the anticipated gas production decline at the Malampaya field in year 2022- hence, investment plans shall be tied to that timeframe.

“That’s a general accepted date. Hopefully, the gas terminal will be ready by that time.
Otherwise, you will not have power or use av (aviation) gas and in that case, the power cost will be very high,” he explained.

It is also a major quiz to investors in the sector whether the LNG terminal for the country be spearheaded by the government — or it shall be held as a purely private undertaking.

Pangilinan further queried: “who will do it (LNG terminal project) – is it the private sector or is it the government? If it is the private sector, how do we go about that process? Will you bid it out?”

He thus emphasized that “we’re actually urging government to decide on that gas terminal – tell us what are the ground rules, because we need it as a fallback. Because most likely, starting 2022, we will have to import the gas.”

The Meralco chairman added “we need the terminal because the gas will arrive here in liquid form – we need to gasify it… it takes minimum three years to build a gas terminal, and we’re hitting the wall.”

Beyond building the LNG import facility though, he noted that the major concern would be the cost of electricity that will be generated from gas fuel.

“What is the cost of that gas terminal – will it mean higher when fed to the power plants?
Paramount is the cost to the consumer because if it’s just one fuel source, then this could be the cost… or if different mixtures, then it shall be at this (rate) or that,” he stressed.