DoE: Limay Power has not submitted application to build LNG import facility

THE Department of Energy (DoE) has yet to receive an application from Limay LNG Power Corp. to build an integrated liquefied natural gas (LNG) import facility, officials of the agency said on Tuesday.

Energy Undersecretary Donato D. Marcos said under DoE Department Circular 2017-110012 or the “Rules and Regulations Governing the Philippine Downstream Natural Gas Industry” companies that plan to build an LNG facility have to seek prior approval from the department.

“Who would give them the notice to proceed?” he said in an interview, adding that based on DoE records Limay LNG Power had so far attended only a preapplication conference.

His comments came after reports said Limay LNG had signed on foreign entities, including a unit of Anglo-Swiss commodity trader Glencore PLC, as partners in the project either to handle engineering, procurement and construction (EPC) or project financing.

“As far as we are concerned [Limay LNG Power has] not officially applied to us,” said Rino E. Abad, director of the DoE’s oil industry management bureau.

He said even if the company was building the project for its own use, that is to power its power plant, the DoE circular requires LNG project developers to always stay open to open its facility for third-party access.

“If your capacity initially is only equivalent to your own use how can you offer a service to other parties kung wala ka naman (if you don’t have) excess capacity,” he said.

Mr. Abad said Glencore had held a meeting with the DoE but not on a project related to LNG. He said the foreign company could either be the provider of the technology, or the EPC contractor.

Glenda G. Martinez, PNOC senior vice-president for management services, said for now the discussions with Limay LNG Power is confined to the rental of a 12-hectare property owned by the agency in Limay, Bataan as the possible site of its project.

“As of now, rental pa lang muna ang pinag-uusapan kasi wala pa silang business proposal na binibigay for us to evaluate (As of now, the discussion is about rental because they have not yet submitted a business proposal for us to evaluate),” she said in an interview.

Aside from Limay LNG Energy Power, Ms. Martinez said PNOC had been in talks with other entities that are keen on renting the property but no agreement had been closed yet. She said the company was keen on a bigger contiguous area covering a total of 50 hectares.

“We are open to whoever will give us a good deal,” she said when asked about a possible partnership with Limay LNG Power.

Based on records from the DoE, Limay LNG Power plans to build a 1,100 megawatt (MW) combined cycle gas turbine project in the area. It has been cleared in July 2018 to conduct a grid impact study, one of the processes required in any power generation project.

The project is in the DoE’s list of “indicative” projects or those that have yet to close a financing contract as well as secure the relevant regulatory permits. Most indicative projects have yet to schedule their target testing and commissioning dates as well as their target commercial operation date.

Sought for comment, Energy Secretary Alfonso G. Cusi told reporters that he would endorse the first LNG integrated facility cleared by his department for inclusion in the list of energy projects of national significance (EPNS). He said his stance is in preparation for a possible shortfall in power supply in 2021 to 2022.