More firms keen on LNG terminal project

PHILIPPINE National Oil Co. (PNOC) has received more unsolicited proposals for an integrated liquefied natural gas (LNG) facility, but the head of the state-owned company expects the current 34 proponents to be whittled down as they group together to form more viable partnerships.

“We will give them until the end of June to come with their own study and due diligence,” Reuben S. Lista, PNOC president and chief executive officer, told reporters.

Last month, he said three Filipino groups and 23 foreign companies were keen on partnering with the government’s energy exploration and development arm for the project.

He said PNOC was not rushing the proponents to avoid receiving “half-cooked” project proposals. PNOC will not give any specifications for the project, leaving the details up to the proponents.

“(This) LNG project will start with $1 billion and might end up to something like $2.4 billion,” he said, adding that the project’s components would all be modular.

Mr. Lista said PNOC is not competing with the private sector when it floated the LNG project. Before he assumed his position late last year, several Philippine companies had already expressed plans to put up a receiving terminal for imported LNG, storage and re-gasification facilities and natural gas-fired power plant.

“When they learned that we are serious in putting up the facility, I think wisely enough and rightly so, they are postponing the building of their own storage facility,” he said. “They already signified their intention to join us, they have been actually present during our discussions with possible partners.”

The country currently sources from the Malampaya gas field, where the reserves are expected to start running out by around 2022 to 2024. The natural gas project, offshore of northwest Palawan, delivers up to 20% of the country’s electricity requirements.

“We are assuring them that they will have source of LNG after 2024,” he said, referring to operators of power plants that run on natural gas.

Mr. Lista said he was looking at PNOC to be the major stakeholder in the project. Its equity will be its banked gas, which is the government’s share in the Malampaya natural gas reserves.

“Definitely, PNOC has 40% (because of the) banked gas,” he said. —