PNOC risks being overtaken by other groups’ proposals for LNG hubs

PHILIPPINE National Oil Co. (PNOC) is at risk of being overtaken by other entities with complete proposals to build an integrated liquefied natural gas (LNG) hub as the state-led company continues to search for the right partner for the project, the Energy chief said.

“[It] is a risk,” Department of Energy (DoE) Secretary Alfonso G. Cusi told reporters. “Habang naghahanap sila, tumatagal

sila sa pagpili ng partner nila (While they are looking, they incur delay in the selection of a partner) because they want also to make sure that the partner that they are getting are meeting the standard and will serve the country’s interest,” he added.

Mr. Cusi said the consideration for choosing the best LNG hub proposal is not hinged on a “bottomline.”

“[Ang] tinitingnan dito (What is being considered here is) what is good for the country. So if they (PNOC) fail, [it’s] not because they want to fail, but

hindi sila makakuha ng tama (because they could not find the right partner),” he said, but adding he was sure PNOC would be able to find one.

Mr. Cusi’s statement comes after reports quoted him as saying that three groups have submitted proposals for an LNG hub, a project that the DoE had been pushing in part to make the country a strategic base for trading the fuel and to prepare for the expected depletion of the country’s only gas find — the Malampaya gas-to-power project off the Palawan coast.

The Energy chief said the DoE would not compromise the schedule of the LNG project by waiting for PNOC and its partner to be compliant with the financial and technical requirements.

Mr. Cusi’s comments come after Lloyds Energy Group LLC announced that it had submitted a letter of interest to PNOC to join in the selection of the agency’s joint venture partner to develop an LNG hub in Batangas Bay.

The Dubai-based firm said it has a proposal together with China Kaicheng Energy Ltd. to handle the project. It becomes the first entity to come forward with firm plans after PNOC, the DoE’s corporate arm, last month formally invited interested bidders to be its joint venture partner that will design, build, finance, operate and maintain the LNG hub.

PNOC, along with its chosen joint venture partner, will be competing with two other interested proponents, namely: the consortium between Phoenix Petroleum Philippines, Inc. and China National Offshore Oil Corp.; and Lopez-led First Gen Corp., which owns several gas-fired power plants.

The proposed LNG hub is required to serve the energy industry, giving the pioneering proponent an advantage over late entrants. Five gas-fired power plants in Batangas, with a combined capacity of 3,211 megawatts, are the main customers of the Malampaya project. The gas find is expected to be depleted starting in 2024. —