Sep 132016

MANILA, Philippines – The Departmenty of Energy plans to spearhead the establishment of a liquified natural gas (LNG) terminal, whether the Malampaya deep water gas-to-power project gets extended or not, to ensure continued supply in the country.

The DOE will put up a LNG terminal to ensure LNG supply in the country, Energy Secretary Alfonso Cusi said in an interview on the sidelines of a Senate hearing yesterday.

“Continuity of the operation is important because we have a huge requirement of at least 2,700 megawatts (MW),” he said. “We will make that LNG (terminal) in Batangas to supply gas to power plants.”

Currently, the Philippine National Oil Co. (PNOC), the DOE’s corporate arm, is initiating a study for the project, which has garnered interests from the private sector, the Energy chief said.

“There are a lot of interest in the private sector. As for us, we are open to that. Whatever is best for the country, that’s our direction,” Cusi said.

The LNG terminal is aimed to meet the country’s requirements beyond the life of the Malampaya deep water gas-to-power project offshore Palawan.

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Earlier, Cusi said government is eyeing to build a 200-megawatt (MW) LNG plant in the same location to provide an emergency source of power when the Luzon grid loses supply due to plant outages.

The license for Service Contract (SC) 38 that allows the exploration of the Malampaya gas field in northwest Palawan will expire in 2024 but this can be applied for extension with the DOE.

The Malampaya project supplies the LNG needs of the Sta. Rita and San Lorenzo power plants of the Lopez Group and Ilijan plant under San Miguel Group.

Another wave of generating capacities will come from the Lopez Group’s 100-MW Avion plant and the 414-MW San Gabriel plant, both in Batangas. The group is looking at two other 414 MW plants.

Australian firm Energy World Corp. (EWC) is also developing two 200 MW units of natural gas-fired power plant in Quezon province.

However, the consortium holding the license of SC 38 or the Malampaya project is currently facing challenges that prevent it from applying for an extension.

“In case there will be no renewal [for the license], we are doing something which is the LNG facility,” Cusi said.

If the license is not renewed, the DOE chief said SC 38 will be reverted to the government, then government will continue the operations.

“In continuing the operations, the DOE has no personnel to operate that. All options are being looked at, we can privatize it, engage services of third party,” Cusi said.

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