Published November 26, 2018, 10:00
PM By Myrna
M. Velasco
The Department of Energy (DOE) is at
the process of crafting the rules that will institutionalize the quality
standards of natural gas that will be extracted and/or imported into the
country.
The department has issued its draft
Circular and up for comments and inputs of relevant stakeholders in the
shifting gas market in the country.
On enforcing quality of gas that
will be utilized in the energy sector, the DOE took its cue from the set of
standards drawn up as early as year 2016 – or what has been concretized as
PNS/DOE QS 011:2016.
The DOE has stipulated that “all
entities engaged in the business of importing, trading, supply and distribution
of natural gas, shall supply natural gas to end-consumers in the country,
complying with the specifications of PNS/DOE QS 011:2016.”
In terms of unit of measurement of
the gas supply, it has been specified that the basic unit be expressed in cubic
meters and unit measurement shall be expressed in joules – hence, all reporting
shall also be done on such prescribed unit of measurements – while prefixes be
set in megajoules, terajoules, petajoules or as appropriate.
For gas with superior calorific
value and is anchored on Wobbe index, the DOE noted that such “shall be
expressed in megajoules per cubic meter.”
The Philippine gas sector is
confronted with its market reset in the 4-5 years given the much anticipated
decline of production at the Malampaya field, hence, the DOE is working on a
pathway that will ensure the continuous flow of gas supply in the country.
The remedy being pushed so far is
importation of liquefied natural gas (LNG) that shall be manned by the
DOE-selected entity to be putting up the LNG import facility.
Other than prescribing the
standards, however, players in the industry are more interested to know how
government regulators will be approaching gas pricing – given the fact that
even international markets now have fragmented indices when it comes to setting
the cost for the commodity.
So far, the DOE has been silent on
that realm despite many assertions from various sectors that gas may come as a
more expensive option compared to other fuel technology choices that could
power the country’s economic growth trajectory.
Primarily for the Asian market, it
was noted that uncertainties continue over competitive relationship between
oil-linked and Henry Hub-indexed LNG prices – and there’s also the
precipitation of other price indices across regional markets.
Industry and market players reckoned that
enhanced flexibility in LNG transactions will be essential in establishing a
well-functioning LNG market in the region – and players are likewise required
to introduce pricing mechanisms that timely reflects prevailing market conditions.
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