Thursday, January 17, 2019

Tanglawan Consortium to include PNOC in LNG project



By Lenie Lectura-  January 17, 2019

TANGLAWAN Philippine LNG Inc. could take in state-firm Philippine National Oil Co. (PNOC) as a stakeholder in its capital-intensive LNG (liquefied natural gas) project.
Tanglawan is a joint venture between Philippine fuel retailer Phoenix Petroleum and China’s largest LNG importer and terminal operator, CNOOC Gas and Power Group Co. Ltd.
Energy Secretary Alfonso G. Cusi said, “Phoenix and PNOC have agreed in principle” for PNOC to be part of the LNG project, which was recently issued a Notice to Proceed by the Department of Energy.
“[PNOC] can be one of the stakeholders,” said Cusi when asked what would be PNOC’s participation in the project. “The PDNGR [Philippine Downstream Natural Gas Regulation] does not mandate or require PNOC to be a stakeholder. It’s a contractual or business decision between PNOC and any private stakeholder.”
When asked if PNOC’s role can be likened to its participation in the Malampaya project in which PNOC-Exploration Corp. (EC) holds a 10-percent stake in the Malampaya consortium, Cusi said “that’s a commercial decision to be made by PNOC.”
As of press time, Cusi clarified that he has not received any official report on an actual agreement that would include PNOC as one of the stakeholders. PNOC and Phoenix officials did not reply when sought for comment.
Tanglawan plans to break ground by 2019 for the regasification and receiving terminal with a capacity of 2.2 metric tons per annum, with commercial operations targeted to start by 2023.
The LNG facility will help support the demand for a clean, low-cost, and environment-friendly energy source in Luzon and contribute to the sustainable development of the Philippine economy.
The integrated long-term project plan also aims to develop a gas-fired power generation facility with up to 2,000 megawatts of installed capacity.
After the issuance of the notice to proceed from the DOE, Tanglawan still needs to secure other pertinent permits as provided by the PDNGR. The requirements for the next six months, extendable for another six months based on valid reasons, include Environmental Compliance Certificate and the green light from the National Commission on Indigenous Peoples.
Also, if applicable, local government endorsement is required. The project also needs to undergo financial closure.
Aside from Tanglawan, two more firms filed their respective notice to proceed applications with the DOE.
US floating LNG player Excelerate Energy filed early this month an application for a permit to proceed with its plan to construct a proposed floating LNG terminal.
The pioneer and market leader in innovative floating LNG solutions is planning to construct the facility in Batangas.
Aside from Excelerate, the DOE has received a similar application from Lopez-led First Gen Corp.
First Gen?s application stated that it will construct a LNG terminal in Batangas City with its partner Tokyo Gas Co. Ltd.
Tokyo Gas will take a 20-percent participating interest in the FGEN LNG project and provide support in development work to achieve a final investment decision (FID). Afterwhich, the parties will enter into a definitive agreement to proceed with the construction of the  FGEN Batangas LNG terminal project.
Meanwhile, the DOE has extended the permit of Energy World Corp. (EWC).
EWC has been granted near the end of December 2018 a permit by the DOE to build the LNG import facility at Pagbilao Grande Island.
The permit provides EWC an additional 24-month construction period that will enable the completion date for the first tank of the LNG facility to be aligned to the commercial operation date of the associated 650megawatt (MW) power plant.
It will also provide time to align the NGCP switchyard expansion under construction and for the construction of the second LNG tank.
The 650 MW has been recognized as the anchor off-taker of the LNG project which consists of two 130,000-cbm LNG tanks, a dedicated jetty and marine infrastructure as well as regasification and other ancillary facilities.

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