DOE issues notice-to-proceed for US firm’s FSRU project

Published September 28, 2019, 10:00 PM By Myrna M. Velasco

https://business.mb.com.ph/2019/09/28/doe-issues-notice-to-proceed-for-us-firms-fsru-project/

The Department of Energy (DOE) has finally approved the notice-to-proceed (NTP) for the propounded floating storage regasification unit (FSRU) of American firm Excelerate Energy L.P., which will likely command an investment of US$250 million.

Based on the submitted work program of the Texas-headquartered company, the construction of the FSRU facility will start October this year until June 2021 or within a stretch of two years.

Upon completion of the facility as targeted third quarter of 2021, its prospective market will be the gas fleet expansion of SMC Global Power Holdings of the San Miguel group.

As stipulated with the energy department, the diversifying conglomerate is eyeing to lean on gas supply sourcing from the FSRU for its expanded gas-fed generating assets of aggregate 1,800 megawatts (MW).

The site of the FSRU installation will be proximate to the existing 1,200MW Ilijan gas-fired power plant in Batangas. The power plant itself is anticipated to be turned over to the San Miguel group in 2022, following the conclusion of its independent power producer administrator (IPPA) contract with state-run Power Sector Assets and Liabilities Management Corporation.

According to the DOE, the FSRU installation of Excelerate Energy “will have a storage capacity of 150,000 cubic-meters, to be located at about 9.5 kilometers offshore in the Bay of Batangas.”

On the project timeline set out by the US firm, Energy Secretary Alfonso G. Cusi indicated that “by the third quarter of 2021, we are expecting that Excelerate’s FSRU LNG facility will commercially operate.”

The energy chief noted that the slew of approvals granted on LNG storage facilities had been anchored on the anticipated gas production decline; then the eventual depletion of the Malampaya field.

Relative to the NTP, the project proponent is required to comply with the conditions precedent within the prescribed six months prior to advancing into construction phase.

Such shall include the submission of permits from various government agencies as well as endorsements from relevant local government units.

And at the stage where it already concluded financial closing, it will need to submit proof of such to the energy department.

Once that is accomplished, the DOE shall subsequently issue the permit-to-construct (PTC) that will then authorize the actual construction of the facility.

On the gas offtake agreement, the energy department indicated that the power generation investment arm of the San Miguel group already “expressed interest to be the target power customer of Excelerate.”

By January 2022, SMC Global Power laid down that it will be requiring new round of gas supply to satiate its requirements over 15 years.

Solar-powered water supply, desalination plants for Minsupala

Published September 27, 2019, 4:12 PM By Ali Macabalang

https://news.mb.com.ph/2019/09/27/solar-powered-water-supply-desalination-plants-for-minsupala/

COTABATO CITY – A joint project will introduce solar-powered sources of water for drinking and irrigation in all remote, off-grid and island communities in Minsupala – an old tag for Mindanao, Sulu archipelago and Palawan.

The Mindanao Development Authority (MinDA) and an Israeli agricultural firm, in collaboration with the Department of Interior and Local Governments (DILG), have agreed to design a technical and financial plan to provide Minsupala villages with water supply and desalination plants powered by solar energy.

Dubbed the Mindanao Rural Water Supply Program (MinDAWater), the project is espoused by MinDA Chairman Secretary Manny Piñol and DILG Secretary Eduardo Año following an arrangement with the LG Group, an international agricultural firm.

In a statement, Piñol said the project will be funded with an initial $500-million loan which could be accessed by local government units at concessional rates through local banks.

“We are designing a new scheme in the financing of LGU projects where they could access loan funds through a partnership between the foreign funders and local banks,” he said.

Last Wednesday, the MinDA chief and his technical staff met in Davao City anew with officials of the LR Group, and discussed the details of the program.

The LR Group is the same entity that offered to build 6,200 units of solar-powered irrigation systems with a backup financing payable in 15 years with a three-year grace period, a MinDA statement said.

It established two proto-types of solar-powered irrigation units linked to a computer system and equipped with a “fertigation tank” in Lumban, Laguna, when Piñol was secretary of the Department of Agriculture, the statement said.

As soon as the financial and technical package of the MinDAWater program is finalized, local government units all over Mindanao and Palawan will be invited to the roll-out and project implementation scheduled this year.

The MinDA administration has identified water, along with power and rural infrastructure, as the “most urgent need of Mindanao and Palawan” to increase productivity and address health concerns.

ERC refuses to confirm ‘least cost’ claims in new Meralco contracts

Published September 27, 2019, 10:00 PM By Myrna M.Velasco

https://business.mb.com.ph/2019/09/27/erc-refuses-to-confirm-least-cost-claims-in-new-meralco-contracts/

The Energy Regulatory Commission (ERC) is still not inclined at confirming that the new power supply agreements (PSAs) underwritten by power utility giant Manila Electric Company (Meralco) are on the “least cost” sphere as these are still subject to the regulatory body’s evaluation.

ERC Chairperson Agnes T. Devanadera forthrightly stated that “at the moment, we cannot as yet determine or confirm whether the proposed rate in the Meralco PSA adverted to was indeed the least cost.”

She qualified though that “once the subject Meralco PSA application has been filed, the ERC will conduct a thorough evaluation to ensure that the proposed rate in the PSA is the least cost.”

The regulatory body indicated that in its evaluation and eventual ruling on the PSA applications arising from the conduct of competitive selection process (CSP) of the DUs, it will have to guarantee that the consumers will only be afforded the “least cost option” to pay for in their future electric bills.

By edict, the CSP exercise or the auction of power supply procurements of the DUs must yield not just the “lowest cost” for Filipino consumers, but the procuring distribution utility must also ensure that such power supply must be delivered as needed.

In the recent CSPs of Meralco, it procured brownfield baseload capacity of 1,200-megawatts to partly serve its 10-year requirements; then 500MW for the mid-merit needs of its load network for the next five years.

The power supply deals had been cornered by the industry’s major players – such as the various energy corporates of the San Miguel group; PHINMA Energy Corporation (recently renamed as AC Energy Philippines, Inc.) of the Ayala Group; and First Gen Corporation of the Lopez group – based on their headline rate and all-inclusive levelized cost of energy (LCOE) offers.

Following the conclusion of the CSP and the signing of the contracts, the parties-in-interest will need to file these power supply contracts with the ERC for its evaluation, validation and then approval.