PNOC budget hangs due to feasibility study lack on LNG terminal

The Senate has held off deliberations on the proposed budget of state-owned Philippine National Oil Company (PNOC) due to lacking submission of its feasibility study on planned liquefied natural gas (LNG) terminal and related gas infrastructure projects.

“We had to defer because if you look at the budget, there’s that provision for R505 million as new allocation for LNG terminal but it does not have a feaasibility study yet,” Senate Committee on Energy Chairman Sherwin T. Gatchalian said.

He indicated that they cannot just fly blind in approving an enormous amount “for something that we don’t know if it will make money or not.”

Gatchalian opined that if the government would invest that R500 million for LNG terminal as stipulated in the state-run firm’s proposed budget, “we want to make sure that they will generate profit from it.”

He added that, at this point “there’s no feasibility study to prove that the planned investment is worthwhile or not, so that is our request – that they give us first the feasibility study and they must explain to us the vision of that LNG terminal or LNG hub, then we’ll have to see if that is feasible or not.”

PNOC had cast multi-tiered ventures for the “rebirth” of the country’s gas market that will be anchored this time on value chain development of LNG facilities.

Its major planned projects include a power plant of 200-megawatt capacity and LNG terminal with associated facilities and distribution networks.

The board of the state-run firm postponed last month its decision to come up with a shortlist on prospective investors on its planned LNG integrated terminal.

PNOC Board Chairman and Energy Secretary Alfonso G. Cusi told reporters that they had to defer a decision as they want to carefully examine first what are the options they could have on the proposed venture. (MMV)